- US Equities furthered its decline following Wednesday’s Fed hike of the Fed funds rate by 75 basis points. Technology and Financials especially sold-off fearing further tightening before year-end. The odds of a hard landing have spiked substantially as the Fed has indicated it will do what it takes to reign in inflation. The S&P 500 declined 0.8%, finishing below 3800 and retesting June lows.
- Asia stock markets continued its sixth weekly decline today. The MSCI Asia ex Japan index fell to a 2 year low and down 3% for the week. Elsewhere in Asia, Singapore’s consumer price index rose more than expected, set to increase to 7.2%, compared with July’s 7% print.
- The Bank of Japan made a dramatic move to support the battered yen for the first time since 1998, following its decision to maintain ultra-low interest rate. The yen has depreciated over 20% against the dollar for the year. The yen surged over 2% post the decision.
- The longer dated US Treasuries sold-off pushing 10-year yield up 18bps to 3.71% playing catchup to expectations of tighter monetary policy and a slowing economy. Bond yields in Asia also pushed higher, with Australia’s 10-year yield up 20bps, the highest since June this year.
- Gold stayed flat at $1,671 as the U.S. dollar held close to recent highs. The non-yielding asset has suffered with rising rates, down nearly 20% since March levels. Crude oil prices edged lower amid recession fears and a stronger U.S. dollar. WTI crude futures were down 0.4%, at $83.19 per barrel.
