In today’s Money Weekend…it’s been a wild ride over the past week…the Australian dollar has seen stiff selling pressure…the situation remains volatile…and more…
It’s been a wild ride over the past week, with the S&P 500 selling off sharply as expected.
In today’s ‘Closing Bell’ video, I have a look at the key markets that are causing volatility to pick up.
I analyse the US 10-year bond yield, S&P 500, Nasdaq, Russell 2000, USDJPY, and AUDUSD.
The announcement during the week that the Bank of Japan has doubled down on their determination to keep the Japanese 10-year bond yield at or below 0.25% saw the yen collapse from 128.00 to 131.00.
Are investors borrowing in yen and investing offshore, safe in the knowledge the yen will continue to weaken?
Perhaps that will provide buying support in US bonds and equities. There was a rally from oversold levels in US stocks that occurred after the BOJ came out with their announcement, so that may be the case.
The situation remains volatile despite the bounce in stocks late in the week.
Another bout of selling could see the S&P 500 fall below the low of the correction of the past few months, and that could ignite further selling.
The Australian dollar has seen stiff selling pressure since I told you it looked like it would turn down a few weeks ago. It should find buying support around here, but all bets are off if it falls below 70 US cents. I’d expect to see a quick drop to 68 US cents if that occurs.
Click on the picture below to watch my latest instalment of the ‘Closing Bell’.
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Until next week,
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Murray Dawes,
Editor, Money Weekend
