Worldwide market bloodbath. Indices around the world suffered devastating losses on Friday as recession fears ramped up in earnest following poor US economic data. The cracks began to emerge last Wednesday after a double whammy of high jobless claims and a manufacturing PMI that severely missed expectations. The data triggered a selloff in US markets on Thursday that continued after-hours and then carried over into the Asian session on Friday.
The Nikkei 225 wasted no time nose-diving into the abyss as soon as the opening bell chimed. Japanese markets face the added pressure of a strengthening Yen following a surprise decision from the Bank of Japan last Wednesday to increase rates for the second time this year. The Japanese index closed the day almost 6% in the red, now down 15% from its record high just a few short weeks ago. Other Asian indices quickly suffered the same fate, with the Korean Kospi Composite losing 3.7% on the day and the Hang Seng Index closing 2.1% lower.
As dawn spread westward, so too did the selloff in stocks and commodities alike. The European session would see the FTSE 100, CAC 40 and DAX crumble 1.3%, 1.6% and 2.3% respectively. To add insult to injury, the American session kicked off with the publication of Non-Farm Payrolls, which unveiled dismal employment data in the US jobs market. July expectations of 175k new jobs were laughably swept aside to reveal an actual figure of just 114k. Moreover, the unemployment rate unexpectedly rose to 4.3% from 4.1% for the previous month. The Dow Jones, S&P 500 and Nasdaq Composite would go on to lose 1.5%, 1.8% and 2.4% respectively, placing the latter in technical correction.
The loss of confidence saw the Dollar bleed heavily on Friday, with the DXY falling over 1%. The huge volatility in currencies was particularly stark in the Yen, which gained a whopping 1.9% over the Dollar. The pair has experienced almost a 10% swing in under a month. Gold briefly looked like it fancied challenging its previous record high but ultimately closed out the day 0.1% lower. Oil prices buckled under the prospect of economic slowdown, falling 3% by the end of the week and prompting OPEC to consider production cuts.
If the morning Asian session is anything to go by then we are in for a brutal time in the markets today. The Nikkei 225 and Kospi, which had not had a chance to digest the poor NFP data last Friday, are already both down 6%. The Yen has gained yet another percent over the Dollar in the past few hours alone. Meanwhile, crypto is haemorrhaging money left right and centre, as Bitcoin loses $55k.
Risk Warning : Trading derivatives and leveraged products carries a high level of risk.
OPEN ACCOUNT
