The last trading day of the month has seen some fairly strong selling in stock markets around the globe as the fallout from the BOJ meeting continues to be felt across all asset classes. Month end rebalancing could be contributing to the sell-off, but it feels like it is rooted in a souring of market sentiment following the decision by the Japanese central bank to stand pat on any further additional monetary easing.
The main economic releases of the afternoon came at 13:30 with both Canadian GDP and US Core PCE price index data both coming in in line with expectations. Misses in less widely viewed data came after with the US Chicago PMI dropping to 50.4 and a downward revision in the University of Michigan consumer sentiment print to 89.0 from an expected 90.3 have done little to aid the dollar’s cause as the Greenback lunges to an 11-month low.
European indices are ending their week in the red with the Eurostoxx (-2.01%) the worst hit and slipping back below the 3000 level to trade 2968 on the cash close. The Dax (-1.85%) is always deep in negative territory and whilst the FTSE (-0.45%) is faring comparatively well it has still posted a first weekly loss in over a month. Across the pond the US100 (-1.87%) leads the way lower as the slump in Apple shares weighs down on the tech index.
Brent Oil (-1.14%) is lower on day but still set to post it’s biggest monthly gain in six years which is in excess of 20%. WTI (-0.59%) has also lost ground going into the European close after a report that OPEC has produced record levels of crude for the month. The drop in stocks has seen investors rush to put money into perceived safe-haven assets such as Gold (+2.08%) which has surged higher to trade it’s highest level in over a year.
The story of the day, and also the story of the week in the Currency space comes in the USDJPY (-1.24%) pair which now trades with a 106 handle after continuing lower after yesterday’s plunge. Both the EURUSD (+0.84%) and GBPUSD (+0.12%) end the month near their highs as weakness in the buck persists. USDCAD (+0.01%) is little changed despite the data releases mentioned earlier.
Looking ahead it’s a busy week beginning with Chinese manufacturing data on Sunday night. The main event comes next Friday with the US Non-farm payrolls report and more signs of strength in the labour market may provide a catalyst for a recovery in the US Dollar.
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