Trade tensions weigh on the global equity markets
Bank of England delivers a 25 bp rate hike
Antipodean currencies dive along with commodities
Japanese yen benefits from the risk-off mode
The early trading on Thursday was marked by declines across the global equity markets as trade tensions seem to weigh down stocks once again. Steep declines can be observed especially on the German, Italian and UK stock markets. Moving to the FX market one can notice that JPY is outperforming other majors, what is not surprising given renewed uncertainty over US-China trade dispute. On the other hand, Antipodean currencies are the biggest laggards among majors reflecting sell-off on the commodity market. Speaking of commodities, zinc and lead are the only metals to produce gains today while corn is the only grain to do so. As BoE and Fed have already made their interest rates decisions markets’ attention shifts to the NFP report scheduled for tomorrow.
Signs of easing downward pressure on the cryptocurrency market could be spotted recently. Over the past 24 hours a majority of cryptocurrencies did not produce any major moves. Bitcoin is testing the area marking the upper limit of the previous consolidation range while Ethereum is trading near its previous month’s low.
There is no doubt that the Turkish lira has been among the most beleaguered currencies in the world over the recent months, and this trend seems to be unlikely to reverse any time soon. Yesterday we saw another fresh record low on the TRY after the US imposed sanctions against two Turkish ministers over the continued detention of an American pastor.
The Fed refrained from changing interest rates in August but an upbeat view on the economy seems to suggest a third interest rates increase this year at the September meeting. This has pushed the EURUSD pair slightly down but the pair remains within a range. Can the NFP report provide a long awaited impulse?
Chinese companies expand into new technologies often by acquiring enterprises from the other countries. Such approach was criticized by the US and called stealing intellectual property that poses a national security risks. Germany seems to be adopting similar approach as Angela Merkel’s government vetoed the takeover by Chinese company for the first time yesterday.
In line with expectations the Federal Reserve kept settings of its monetary policy untouched exerting just a little impact on the greenback. The statement was really short and succinct and compared to the previous one not many changes could have been noticed.