ASX braces for a steep drop as Wall Street slumps
Volatility continues to remain prominent in global markets as we saw a sharp sell-off overnight on Wall Street which wiped out Monday's gains. The Dow Jones shed 799 points to finish 3.1% lower while the S&P 500 and NASDAQ also fell 3.2% and 3.8% respectively. There was no single event that triggered the decline however the two key culprits affecting sentiment were Trade Truce Pessimism as well as flattening US Bond yield curves.
On Monday the 3 year Treasury bond yield surpassed it's 5 year counterpart. Often an inversion or flattening of bond yield curves indicate a potential economic slowdown, however this is typically a gradual process. Other geo-political issues further deteriorated investor sentiment. Theresa May suffered another setback to a successful Brexit as her government was found in contempt.
ASX futures were down 75 points at 8:15am. The AUD is trading at 73.39 US Cents, Brent Crude Oil rose again to $62.06 USD per barrel and the US 10 year bond yield fell to 2.91%.
Australia – Economic Growth Data released
Global – China services PMI, Euro Zone Markit services PMI, US equity and bond markets closed for the funeral of former US President George HW Bush.
This article was written by Charles Odontuyaa – Relationship Manager, Rivkin Securities Pty Ltd. Enquiries can be made via firstname.lastname@example.org or by phoning +612 8302 3633.