Start with Asia which traded heavy given ongoing uncertainty surrounding US/China trade talks, but it was Japan turn to take a knock today. The Yen continues to find a safe-haven bid even as the Nikkei lost 1.35%. Money is being taken off the table as concerns grew and economic activity begins to be questioned.
Pimco added the icing on cake today
The Yen was bid as emerging market currencies suffer with the core. Hang Seng lost -0.85% whilst Shanghai actually closed small positive having spent much of the day in negative territory,monetary easing is really helping china and no negative headline for the day for YUAN,SENSEX closed on the days lows as the INR narrowly rejected the early 69 although it traded upto 69.25 in offshore market.The hot talking point for most of the day, has been Turkey. The Turkish Lira lost an additional 15% today, taking losses over the past two days, to near 25%. A headline from the ECB expressing concerns of European bank exposure took its toll on its currency also.
Yes, Guys it is European banks which are on hook and not American Banks
as a result Euro lost 1.25% today, having broken the early support it was just a one-way street. The headline did not help European stocks and there were just losses across the board. The DAX, FTSE MIB, IBEX and CAC all lost around 2% today, with bank stocks, energy and real-estate all leading the charge.
US stock indices were dragged lower as the negative global sentiment worked its way west. An impressive US CPI print, did not help confidence even though the USD was well bid.
Inspite of US Dollar at year high GOLD prices continued to hold ground
Trump rubbed into Erdogen by raising tariff against Turkey by 15% to compensate for the depreciation of LIRA. Guys this is known as weaponising DOLLAR.
“I have just authorized a doubling of Tariffs on Steel and Aluminum with respect to Turkey as their currency, the Turkish Lira, slides rapidly downward against our very strong Dollar! Aluminum will now be 20% and Steel 50%. Our relations with Turkey are not good at this time!”
The DOW ended the day off 196 points.The smallcap index dipped in and out of negative territory, but eventually finished down marginallyThe nerves around the globe is evident and money leaving emerging markets is running to the USD.
In any war, periphery (rest of the world) will always get into trouble first, and smart money always run towards core (US) and that is exactly what is unfolding in markets.