Markets panic as global growth concerns intensify…
Yesterday’s trading session was an incredibly volatile one. Even though many participants were focusing on Boris Johnson’s Party Conference speech, turmoil across global stocks captivated most people’s attention.
After Tuesday’s shocking US manufacturing reading, yesterday’s softer US ADP private payrolls data pushed markets over the edge. Stock indices plunged between 2% – 3% with the UK FTSE leading the way, down 3.3% at one point. After 10 years of fairly robust global growth, the leading economy, the USA, is now losing its grip. Under the pressure of higher interest rates mixed with trade tensions the economy is beginning to materially slowdown. This sent markets into a state of significant unease.
The usual safe-haven currencies benefited yesterday, the Japanese yen was the stand out performer. However, this time, with the US economy in the spot light, the greenback was not sought for safety and sold off against a number of currencies. GBPUSD rose toward $1.23 in the afternoon session while EURUSD had traction toward the $1.10 handle.
Today sees more PMIs on the economic calendar. In Europe it’s all about services this morning. All GBP watchers will be paying close attention to the UK services read. From the US, services as well as manufacturing data will be crossing the wires in the afternoon session.
Written by Viv Savani. 10:24am, October 3rd 2019
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