The global actions fell on Wednesday and safe haven assets such as US Treasuries and the yen were supported by a series of mixed economic data, while Wall Street traded with ups and downs after Tuesday’s correction.
Oil futures fell for a third straight day, but at a slower pace than on Tuesday, when they lost more than 4%. They fell 0.6% in the session due to pessimism about demand, amidst contradictory signals from producers about the increase in supply.
Bond yields fell, but the closely watched yield curve between two- and 10-year notes briefly turned positive, which could be a bearish indicator for the U.S. economy. although it later stood at -0.6 basis points.
Wall Street Indices declined on Tuesday, posting their biggest drop since early August, as investors took profits in growth stocks and reacted to weaker-than-expected US manufacturing data.
“Sales that occur without significant news and are more profit-taking oriented tend to quickly subside and stabilize at a lower level. That’s what we’re seeing today,” said Rick Meckler of Cherry Lane Investments in New Vernon, New Jersey.
“It’s been a bit of a rush to the exits, which we’ve seen before, especially in a market that’s rallied so much. Once that happens and there’s a bit of a shakeout, it seems to find its footing again and start to recover,” he added.
New signals give markets some relief
Department of Commerce data showed Wednesday that new orders for U.S. manufactured goods rose more than expected in Julydriven by defense aircraft, but demand in other sectors was subdued due to high borrowing costs.
U.S. job openings fell to their lowest level in three-and-a-half years in July, suggesting the labor market is losing steam and prompting traders to increase bets that the Federal Reserve will cut interest rates by half a percentage point this month.
On Wall Street, andThe Dow Jones Industrial Average fell 3.11 points, or 0.01 percent, to 40,933.82, the S&P 500 .SPX gained 1.18 points, or 0.02 percent, to 5,530.11 and the Nasdaq rose 28.97 points, or 0.17 percent, to 17,165.27.
The MSCI World Equity Index fell 3.94 points, or 0.48%, to 815.53, while the pan-European STOXX 600 index fell 1%.
In the currency marketsthe dollar depreciated by 0.32% against a basket of six major currenciesto 101.37 units, after the probability of a further rate cut by the Fed increased. The US currency fell 0.82% against its Japanese counterpart, to 144.26 yen, while the euro rose 0.33%, to 1.1079 dollars.
In fixed-income markets, The yield on 10-year bonds fell 5.1 basis points (bp) to 3.793%; the 30-year bond rate fell 4 bp to 4.0898%; and the two-year note rate, which usually moves in line with interest rate expectations, fell 9.1 bp to 3.7971%.
Gold prices improved slightly after hitting a nearly two-week low after three sessions of declines. Spot gold was up 0.08% at $2,494.69 an ounce, and U.S. gold futures were down 0.26% at $2,483.50.
Source: Ambito
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