The stock market in Asia dropped again after a prompting drop on Wall Street as the possibility of further interest rates and political instability in Europe intensified concerns over a recession. A monitoring index of Asian stocks was on its way to its seventh consecutive week of losses, as well as a monthly slide that would be the sharpest since 2008.
Futures in the US became more unstable as the S&P 500 index dropped by over 2% to its deepest fall in nearly two years. The Dollar oscillated between profit and losses against other top fiat currencies, especially the Pound, while investigators assessed risks coming from the UK’s debt crisis. Treasury yields changed just a bit after several days.
The volatility index of the Cboe has risen beyond 30 for nearly a whole week as it reflects the high concerns among stock investors. Federal Reserve top officials have continued with their hawkish outlook. The inflation in Germany has risen above 10% and the plan of the UK government to cut taxes is still weighing on the market.
The Bank of Japan increased its bond-buying plans at an operation, Friday, while it actively seeks to put a cap on upward yields. Prime Minister, Fumio Kishida has asked his government to draft an economic stimulus plan for October ending.
Long Chinese Holiday Ahead
The offshore Chinese Yuan dipped and it was at risk of a deeper decline in the coming week as China heads to a week’s holiday. Beijing will not be able to provide the much-needed guide to investors with daily rates.
An Autonomous Research senior analyst, Charlene Chu, spoke in an interview with Bloomberg. He said the Research assumes that the Chinese government is set to keep fighting this at an administrative level for as long as they can manage it before they come in with intervention and need to sell US reserves.
The Nasdaq 100 index fell by nearly 4% during trade after the President of the St Louis Fed, James Bullard, made a comment saying investors now realize there are going to be more rate hikes in months to come. Nasdaq was pulled down by shares of Apple Inc. that dropped following an analytic downgrade of the Bank of America that warned of weak consumer patronage of Apple devices.
There is a Pulse survey by MLIV this week around how damaging a strong Dollar is.