Global Yields Fall On Risk Aversion
ActionForex | Jun 14, 2016 03:45AM ET
Risk aversion continues to dominate the global financial markets on Brexit fears. Nikkei suffers another day of selloff and is trading down -204 pts, or -1.28% at the time of writing. That followed -132.86 pts, or -0.74% fall in DJIA and -17.01 pts, or -0.81% fall in S&P 500. Sterling remains the weakest major currency this week and stays broadly soft in Asian session. Meanwhile, the Japanese yen is lifted by safe haven flow. In other markets, gold extended recent rally to as high as 1290.3 and is trading firm at 1285. Crude oil, however, stays soft and the near term pull back continues and is hovering around 48.4. The economic calendar is rather busy today with UK inflation and US retail sales being the major focuses. But traders mind will stay on the central bank meetings later in to the week and Brexit referendum next week.
Bond yields tumble globally on safe haven flows too. Benchmark German 10 year yield stayed near zero, close to record low. Japan and UK 10 year yield also dropped to record lows. US 10 year yield also extended recent fall to close down at 1.616%, hitting a four month low. Another factor that's pressuring US yield is the receding expectation of rate hike by Fed. It's clear that there is no chance for a Fed hike this week and markets are only pricing 2% chance. It should be noted that CME futures are pricing in just 18% chance of July hike, comparing over 50% chance pricing a month ago. The chance of September hike is 33%, close to half of 64% pricing a month ago.
On the data front, Australia NAB business confidence dropped to 3 in May. Inflation data will be a focus in European session. UK CPI is expected to rise to 0.4% yoy in May with core CPI up to 1.3% yoy. RPI and PPI will also be released in UK. Swiss PPI, Eurozone industrial production and employment will also be featured. From US, retail sales is expected to grow 0.3% in May with ex-auto sales up 0.4%. Import price index is expected to rise 0.8% mom in May while business inventories are expected to rise 0.2% in April.
Get The News You Want
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.