Morning Markets: Equities dive ahead of Trump speech
- Japan: Household spending (already announced)
- France: GDP estimate (0630 GMT)
- France: Household consumption expenditure in manufactured goods (0745 GMT)
- Spain: Preliminary GDP (0800 GMT)
- EU: Business Climate Indicator, Economic Sentiment Indicator (1000 GMT)
- Germany: Provisional CPI (1300 GMT)
One could be forgiven for imagining that today's very broad plunge across assets worldwide was deliberately fashioned to embarrass President Donald Trump on the cusp of his keynote State of the Union address in Washington this evening. Obviously this isn't the case, but on a day when equities worldwide are bleeding and crude oil and gold have also turned soggy, it'll be amusing to hear Trump declaim his paean to his own policy successes, including "global wealth creation" and "big, big stock market gains".
Still, markets are taking the Trump address very seriously indeed as it will set the tone for the next year of this US administration. The president is expected to focus on his new immigration policy (announced last week), but markets will be most keen to hear any thoughts on international trade, particularly with China.
The heavy losses across equity markets is being fuelled by weaker bonds and strengthening yields as this sparks fears that the increased cost of corporate borrowing will ultimately harm companies' profitability and growth prospects. Let's see if Trump has anything to say about that...
- Shares retreated in Asian markets today, thanks in part to falls on Wall St
- Crude lost ground on the stronger dollar, and an expected end to falling inventories
- The EU says it will retaliate against any Trump move to curb its exports to the US
- Trump's trade policies pose risk to economic progress: Indonesian finance minister
- Free trade will be a hot topic when China, Japan and S Korea hold trilateral talks in April
- Zinc prices hit their highest level since 2007, due to falling stockpiles
- The 10-year Treasury note yield stretched its overnight surge above 2.7%
- South Korea’s Kospi index fell 1% and Australia’s ASX 200 retreated 0.9%.
- Japan’s Nikkei dropped 1.4% and the Hang Seng Index dropped 1.1%
- US crude futures were down 1.2% at $64.79/barrel.
- Brent crude fell 0.85% to $68.88/barrel.
- Gold slipped to $1,334.10/oz, the lowest since January 23
- The release of CPI data on Wednesday is likely to impact the Australian dollar
- The USD against a basket of six major currencies was 0.15% higher at 89.457
- EURUSD fell 0.2 percent at $1.2361 after slipping overnight
- GBPUSD was at $1.4036.
- The USDJPY dollar was 0.3% lower at 108.645
From the Floor
Lost appetite. "We're seeing a bit of risk-off finally after this incredible run higher in equities," says Hardy.
Turning tide. "I would expect a minor correction in the S&P 500, though the bulls may push to 3,000," Cramer Larsson.
Get all the latest from Saxo Bank's trading floors in From the Floor, within the hour.
Bulk commodities sidelined
The market for bulk commodities market including iron ore has been subdued, with traders sitting on the sidelines, says Saxo Capital Markets Australia.
FOMC may seize the day
Most expect this week's Federal Open Market Committee meeting to be a non-event, but the FOMC may decide to retake the initiative with its forward guidance, says Max McKegg.
Morning Markets goes out on the TradingFloor platform at 0800 GMT, Monday to Friday.
Click here to make sure you're up to date with the latest developments.