Rollercoaster markets, Nikkei rebounds 10%
A look at the day ahead in U.S. and global markets from Mike Dolan
The speed and scale of Tuesday's 10% Tokyo bounce after its worst day in 37 years suggests the wild global market swings of the past week are more rooted in speculative churn than economic fright.
While that's only partly reassuring - as persistent market turbulence can itself sap economic activity - there's good reason to believe a slowing U.S. labor market and factory sector do not automatically presage recession. July service sector readings show other parts of the economy are doing just fine.
Any worries about employment weakness through next year should be tempered by the fact the Federal Reserve seems ready to take its foot off the brake and support the expansion. Chicago and San Francisco Fed chiefs on Monday said all options were now on the table for the central bank.
Which leaves investors pondering the real cause of the truly hair-raising moves in market prices since last Wednesday - which saw the VIX 'fear index' of stock volatility jump by its most in one day to its third-highest peak ever.
LOW-VOLATILITY TRADES BUILD
The finger points squarely at the build-up of low-volatility trades, variously involving currency 'carry' plays funded by Japan's yen, short positioning in stock options and even Treasury futures arbitrage involving leveraged 'basis trades'.
Those trades had built a head of steam during a period of peculiarly calm markets, which had seen the S&P 500 .SPX go 356 sessions without a 2% drop until last Wednesday. Yesterday it recorded its second such drop in a week.
All flushed out? Probably not, but the boil may have been lanced at least and allow a more fundamental examination of the state of markets while a holiday-thinned August plays out.
The 10% bounceback in Tokyo's Nikkei 225 .N225 - after Monday's 12% drop aped the worst day of the 1987 crash - showed how quickly things can calm as the yen JPY= cooled even without much new information.
Having plunged more than 8% in a week to its lowest since January, the dollar/yen exchange rate has bounced back from Monday's trough under 142 to more than 144 today.
The VIX, meantime, has almost halved again from Monday's peaks above 65 and hovered about 34 before Tuesday's bell.
Recalibrating slightly panicked Fed easing bets since the weak July payrolls print on Friday, U.S. fixed income markets also found a level. Futures markets now see about 112 basis points of Fed cuts by year-end, compared to more than 130bp at one point a day earlier.
Ahead of Tuesday's $58 billion 3-year note sale and 10-year auction on Wednesday, 10-year Treasury yields regained a foothold above 3.8% compared with a low of 3.66% a day ago, and the 2-to-10 year yield curve stayed inverted after Monday's brief pop positive.
The dollar index .DXY perked up, while the Swiss franc CHf= fell back and bitcoin BTC= caught a toehold, too.
Bruised Wall St stocks saw futures back in positive territory - with gains of more than 0.5% across the S&P500 ESc1, NQcv1, RTYc1.
VOLATILITY
What now?
The still-high level of implied volatility means big market swings are likely until full calm is restored - but attention will refocus quickly on underlying economic and earnings readouts.
A resumption of the busy earnings diary may be first port of call, with Super Micro Computer out on Tuesday to test the recently wobbly reception for AI developments, and other household tech names like Uber and Airbnb are up alongside energy firms and industrial giant Caterpillar.
On the broader economy, the soundings through the second quarter at least continue to show little sign of the sort of sudden economic heart attack suggested by recent market moves.
U.S. banks reported no change in demand for commercial and industrial loans in the most recent quarter, the strongest showing on that measure in two years, according to a Fed survey of senior loan officers published late on Monday.
And in the middle of frenetic rate cut speculation around the world, Australia's central bank ruled out a cut this year, saying core inflation is expected to come down only slowly after it held interest rates steady for a sixth straight meeting.
Key developments that should provide more direction to U.S. markets later on day:
* US June international trade, Canada June international trade. New York Fed's Q2 Household Debt and Credit Report; New York Fed's global supply chain pressure index for July
* US corporate earnings: Super Micro Computer, Amgen, Caterpillar, Uber, Airbnb, Mosaic, Fox, Wynn Resorts, Molson Coors Beverage, Assurant, Progressive, Fortinet, Marathon, Duke Energy, Devon Energy, Constellation Energy, Sempra, Vulcan, DaVita, Kenvue, Zoetis, International Flavors & Fragrances, Henry Schein, Axon, Baxter, Jacobs Solutions, STERIS, Fidelity National Information Services, Trimble, IDEXX, Yum! Brands, etc
* US Treasury sells $58 billion of 3-year notes, $46 billion of 12-month bills
US service sector still growing briskly https://reut.rs/46w351P
Market is confident interest rates will soon be dropping https://reut.rs/4c9zf48
Wall Street's 'fear index' halves again after biggest one-day rise in history https://reut.rs/3Yy6zP7
Nikkei vs yen https://reut.rs/3AcbM5e
Australia's inflation and interest rates https://reut.rs/4fBdk8U
Editing by Bernadette Baum
免责声明: XM Group仅提供在线交易平台的执行服务和访问权限，并允许个人查看和/或使用网站或网站所提供的内容，但无意进行任何更改或扩展，也不会更改或扩展其服务和访问权限。所有访问和使用权限，将受下列条款与条例约束：(i) 条款与条例；(ii) 风险提示；以及(iii) 完整免责声明。请注意，网站所提供的所有讯息，仅限一般资讯用途。此外，XM所有在线交易平台的内容并不构成，也不能被用于任何未经授权的金融市场交易邀约和/或邀请。金融市场交易对于您的投资资本含有重大风险。
所有在线交易平台所发布的资料，仅适用于教育/资讯类用途，不包含也不应被视为用于金融、投资税或交易相关咨询和建议，或是交易价格纪录，或是任何金融商品或非应邀途径的金融相关优惠的交易邀约或邀请。
本网站上由XM和第三方供应商所提供的所有内容，包括意见、新闻、研究、分析、价格、其他资讯和第三方网站链接，皆保持不变，并作为一般市场评论所提供，而非投资性建议。所有在线交易平台所发布的资料，仅适用于教育/资讯类用途，不包含也不应被视为适用于金融、投资税或交易相关咨询和建议，或是交易价格纪录，或是任何金融商品或非应邀途径的金融相关优惠的交易邀约或邀请。请确保您已阅读并完全理解，XM非独立投资研究提示和风险提示相关资讯，更多详情请点击 这里。
