Will this mark a recovery from the global stock market slump?
21.09.2021
- U.S. 20-Year Treasury Auction
- U.S. Housing Starts
Yesterday, the three major U.S. stock indices all fell further, leading to a risk-off market characterized by falling stock prices, lower interest rates, and cheaper crude oil. Bonds were bought, and the yield on the 10-year U.S. Treasury note fell to 1.32%. The default risk surrounding China Evergrande Group, a major Chinese real estate developer, spread, triggering a global stock market sell-off.The VIX (fear index) has surged to 23.5. Gold has rebounded and is trading in the $1,764 range.
While the foreign exchange market is showing a slight trend toward yen appreciation, European currencies and the U.S. dollar are locked in a stalemate ahead of tomorrow’s FOMC meeting, with the euro-dollar pair increasingly stuck in a range between 1.170 and 1.175. However, the euro is holding firm against the pound; ignoring the pound’s sharp decline yesterday, the euro-pound pair has risen from 0.853 to 0.859.
Today’s schedule includes the Swiss trade balance at 3:00 PM, Japanese machine tool orders at 3:00 PM, the UK CBI Business Survey at 7:00 PM, U.S. housing starts, building permits, and the second-quarter current account balance at 9:30 PM, and the U.S. 20-year Treasury auction at 2:00 AM.With Chinese markets closed, risk-off sentiment has intensified sharply recently, and we will be closely monitoring how the foreign exchange market moves in the latter half of September.
Author: Keisuke Sakurai
