Investors in Asia will also have the yen on their radar – the Japanese currency slid to a 15-year low against the euro on Thursday and fell towards 145.00 per dollar, around where Japanese authorities intervened heavily last year.
The loss of bullish momentum on Wall Street on Thursday as the session progressed and renewed ‘bear steepening’ of the U.S. yield curve will unnerve some investors.
The short end of the bond market was a bit more stable, reflecting the view that the Fed is done raising rates. Fed fund futures pricing shows a rate hike next month is off the table completely, and only a 20% chance of another hike by year-end.
Breakeven inflation rates fell too, generally backing up that dovish view. But the long end of the Treasury curve sold off pretty aggressively once again, and rising long-term yields will do little to support risk appetite, far less boost it.
Other notable market moves on Thursday include oil. WTI and Brent crude closed down 1.7% and 1.3%, respectively, meaning U.S. crude futures now may not register a seventh straight weekly gain, which would mark the best run since May last year.
