(As of 7:25 am PST)
US equities started Thursday’s
trading markedly lower following Europe’s course as volatility in the European
bond market picked up yesterday. Higher inflation rates in Europe and comments
yesterday from ECB President Mario Draghi regarding volatility in the region, sent
panic throughout the bond market. Yields
on the 10-year German bund jumped to the highest level of the year yesterday
sending bond prices tumbling in the afternoon. The sell-off in bonds sent money
flowing out of riskier assets this morning across Europe. Stocks are down
across the board heading into the final hour of trading on the European
exchanges. In the US, investors are following the Europe story closely while
also setting up for tomorrow’s non-farm payrolls report. As for economic data
today, reports were mixed. Jobless claims for last week fell to 276,000 from
284,000 in the prior week, while a report on Q1 productivity fell -3.1%, in
line with expectations. Gold and other precious metals are down as is the US
dollar as the euro continued its recent winning streak. Expect volatility to
stick around for the remainder of the day as markets gear up for an important
data day tomorrow.
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