IFC Markets - Analytics

    IFC Markets

    381.50 8.00/10
    74% of positive reviews

    Bond yields are at record lows

    US stocks were traded with negative bias on Thursday after three days of gains as jobless claims fell in May despite slump in nonfarm payrolls. US dollar index, a measure of a greenback’s value against a basket of six major currencies, rose 0.60% to 94.20 on lower jobless claims and weaker other currencies (see US dollar index live). Banking sector was one of the bottom performers with Goldman Sachs losing 1.2% which pushed the Dow index much lower and Wells Fargo losing 2% which weighed on S&P 500 index. The blue-chip index dipped 0.17% to 2,115.48 still close to its all-time high hit a day before. Nine out of ten its major sectors closed in the red with financials leading the decline (-1.2%). Dow Jones industrial average slipped 0.11% to 17,985.19 while Nasdaq composite fell 0.32% to 4,958.62. Chesapeake Energy slumped 5.8% to $4.68. In economic news, the Michigan University Consumer confidence index is expected today at 16:00 CET, the tentative outlook is negative. At 19:00 CET the Baker Hughes oil rigs count will be released, the current number of active rigs is 408.

    European stocks opened lower today on falling commodities prices and Brexit concerns following the bearish movement in the Asian markets. Polls seem to show the rising chances for Brexit. As a result, the investors were risk-averse and turned towards safe bonds which pushed their yields down. The benchmark 10-year German bunds yield fell almost to zero on Friday. Another negative factor for bond yields is lower expectations of the Fed rate hike. The UK bond yields fell to their lows too, same as in US and Japan. Low commodity prices put under pressure oil and mining stocks with BNP Billiton, Anglo American and Glencore losing from 0.6 to 1.1%. Lufthansa stocks lost 4.2% on the news its chief financial officer is to leave the company. As a result, both European indices FTSEurofirst and STOXX EUROPE 600 fell 0.6% on Friday expanding the Thursday losses of almost 1%. The ECB President Mario Draghi said yesterday Europe was at risk of suffering prolonged economic damage from weak productivity and growth. EURUSD is traded at $1.1295 on Friday down from the monthly high of $1.1416 touched on Thursday. Today in the morning the final consumer price index for May came out in Germany in line with expectations. No more significant data are expected today in eurozone.

    Asian stocks retreated on Friday as investors rushed for safe-haven assets concerned with possible Brexit as referendum on the matter will take place as early as on June 23. Nikkei index dived 0.4% down 0.25% this week. Hang Seng index fell 0.7% but closed the week 1% higher. Chinese markets were closed for a holiday today. USDJPY is traded at 107.07 a dollar after a five-week high of 106.26 was hit on Thursday.

    Oil futures prices are slightly down on Friday. Brent crude futures lost 0.7% to $51.40 a barrel down from $52.86 a day before while WTI futures fell the same 0.7% to $50.18 a barrel. Oil prices are being under pressure by stronger US dollar.

    Spot gold fell 0.3% today to $1,264.93 an ounce having touched $1,271.31 overnight still on track to end this week 1.7% higher. Gold is set to advance as investors seek for safe-haven assets this week given uncertainty with Brexit and Fed rate hikes.

    In Russia the Central Bank cut interest rates to 10.5% today which pushed its dollar-priced RTS stock market index 1.5% lower still on track to end this week 4% higher which makes it one of the world’s top performing indices.

    To leave a comment you must or Join us

    By visiting our website and services, you agree to the conditions of use of cookies. Learn more
    I agree