Morning Bid: No let up in volatility

08/08/2024

1 minute read

2024.08.08 02:12

A look at the day ahead in European and global markets from Kevin Buckland

Investors would be well advised to put those neck braces back on, with the start to Thursday’s trading showing that market whiplash is still a worry.

Japan is a case in point, with the starting the day by tumbling as much as 2.5% before entering the midday break in the green. Gains of nearly 0.9% for the yen versus the dollar evaporated over the same period.

And while tech was still a standout underperformer across the region following Wednesday’s more than 1% slump for the , an early slide as steep as 1.3% for Nasdaq futures had flipped to a 0.4% advance.

There was no obvious trigger. Likely more along the lines of the sky having not fallen yet, giving some people courage to scoop up potential bargains.

Bond investors spooked by Wednesday’s poor 10-year Treasury auction sent the yield spiking nearly 9 basis points to 3.977% overnight, but more than half of that move was unwound in early Thursday trading.

Worries about a U.S. hard landing, a massive unwind of yen carry trades, fears of an AI bubble: there is a long and compelling list of reasons to hit the eject button on bets that possibly soared too close to the sun.

And while Asia’s mood has improved as the day progresses, pan-European STOXX 50 futures still signal a 0.9% slide at the open.

There’s little on the European docket of note today, bar a smattering of earnings reports, including from Allianz (ETR:) and Deutsche Telekom (OTC:).

That puts the macro spotlight squarely on the weekly jobless claims figures out of the U.S. later in the day, after last week’s sharp slowdown in payrolls exacerbated concerns of an economic downturn, with global repercussions.

The Richmond Fed’s Thomas Barkin is on speaking duty today, after saying last week he won’t prejudge the path of monetary policy.

Key developments that could influence markets on Thursday:

-Earnings from Allianz, Deutsche Telekom