A daily summary and commentary of events and factors that affect the global markets, with a particular emphasis on the foreign exchange markets.
The Twilight Zone
Share this story:
David Atkinson Foreign Exchange Sales Manager
If there was ever a Friday when markets needed to close out a week and take a huge breath, it is this week. After yesterday’s US equities plunge that erased another 3%+ from US stocks, Europe followed suit. Asian stock markets were only a little less battered, dropping in the 2%+ range. Heading into the weekend, US stocks are down 3%+ yet again as we limp into the weekend.
The US 10-year Treasury yield briefly dropped below 0.70%, and the 30-year Treasury briefly touched below 1.30% -- of course, all-time lows for those instruments. It was only February 20 when the 30-year went below 2% decisively for the first time and February 26 when the 10-year was at the same yield where the 30-year is now.
Cue the Twilight Zone music.
We did have a major economic release today, with non-farm payrolls coming is at 273,000 against consensus estimates of 175,000 with total revisions for the last two months adding another 85,000. The unemployment rate improved by a tick to 3.5%. Average hourly earnings were flat. When the numbers came out, there were essentially no moves in markets since this data was from early-to-mid February before all the craziness started. Interestingly, some commentators noted today that more contemporary data like initial jobless claims have not yet pointed to a major recession, but clearly we are going to see some signs of weakness as slower economic activity works its way through into numbers.
As we have noted before, a situation like this is so incredibly hard to predict in terms of economic effects. We can analyze disruptions like trade wars and credit conditions, but a virus with an asymptomatic ability to spread will see outbreaks in various areas of the world by definition; then, the economic effects pile on after that.
We will leave it there for now. Have a restful, safe weekend.
Want to learn more about international finance, economics, and global events? Sign up for our other Foreign Exchange emails and videos!
Follow City National Bank on social media:
Non-deposit investment products:
Are not FDIC insured,
Are not deposits or other obligations of City National Bank and are not guaranteed by City National Bank, and
Are subject to investment risks, including possible loss of the principal invested.
This report is for general information and education only and was compiled from data and sources believed to be reliable. City National Bank does not warrant that it is accurate or complete. Opinions expressed and estimates or projections given are those of the authors as of the date of the report with no obligation to update or notify of inaccuracy or change. This report is not a recommendation or an offer or solicitation to buy or sell any financial instrument discussed. It is not specific investment advice. Financial instruments discussed may not be suitable for the reader. Readers must make independent investment decisions based on their own investment objectives and financial situations. Prices and financial instruments discussed are subject to change without notice. Instruments denominated in a foreign currency are subject to exchange rate and other risks. City National Bank (and its clients or associated persons) may engage in transactions inconsistent with this report and may buy from or sell to clients or others the financial instruments discussed on a principal basis. Past performance is not an indication of future results. This report may not be reproduced, distributed or further published by any person without the written consent of City National Bank. Please cite source when quoting.
Now accepting scholarship apps Celebrating 40 years of service -- A loan to an innovative company -- Affording your dream home -- Mergers and a new branch in Raleigh View this email in your browser Forward to a friend
Your Market News update for May 30, 2019 | View online Market News News that's moving the market now As Trade-War Worries Linger, Market Seems to Lack Buying Conviction May 30, 2019 8:40 AM | JJ Kinahan 6 min read | Daily Market Update