headlines:
Markets:
- The US dollar is advancing, while the Australian dollar is lagging today
- European stocks fell; S&P 500 futures fell 0.4%
- US 10-year yields fell 6.2 basis points to 3.736%
- Gold rose 0.3% to $1,918.66
- West Texas Intermediate crude fell 1.4 percent to $68.53
- Bitcoin fell 0.3% to $30,079
The risk mood in the markets was already leaning towards the softer side earlier in the day but sentiment has worsened after a somewhat disappointing set of PMI data from Europe.
In particular, there was a sharp drop in French service activity that combined with weak numbers in Germany drove the Eurozone economy into recession at the end of the second quarter.
The lack of estimates has reignited recessionary fears in the region and we have seen yields drop as a result, as traders become less certain about the ECB’s rate hike in September.
EUR/USD fell from 1.0920 to 1.0845 as sellers took over, with the pair now down 0.8% on the day at around 1.0870. USD/JPY was also briefly pulled back as yields fell to 142.80 but rebounded back to 143.20 as the dollar held firmer across the board.
Commodity currencies remain lagging although risk aversion is taking hold as European stocks and US futures remain subdued, along with demand for bonds after the PMI data.
USD/CAD rose 0.4% to retest the 1.3200 mark while AUD/USD maintained 1% lower on the day at around 0.6690, not much changed after falling in Asian trading.
It is now up to Wall Street to see if the wave of risk aversion will continue or if tech stocks can pull off another bounce to close out the week.