Asia Pacific Market Open – Wall Street Selloff, US Dollar, S&P 500, Nikkei 225, USD/CAD, BoC
- Wall Street selloff rate echoed 2008 Financial Crisis plunge as the US Dollar[1], Japanese Yen[2] rose
- The Canadian Dollar[3] was supported by a hawkish hike as well as commentary from Stephen Poloz
- Nikkei 225[4], ASX 200[5] and other APAC equities vulnerable as USD[6] eyes potential new 2018 high
We released our 4Q forecasts for equtiies in the DailyFX Trading Guides page[7]
Wall Street continued to come to terms with the global fundamental reality: rising interest rates, trade wars and political uncertainty can bode ill for sentiment. The divergence seen between US benchmark financial indexes and emerging markets throughout most of this year now also seems more aligned now. On Wednesday the S&P 500[8], Dow Jones[9] and NASDAQ[10] Composite tumbled 3.09%, 2.41% and 4.43% respectively.
Looking at the chart below, these indexes are now on pace for their worst performance in a month in roughly a decade. The progress that they have also made this year thus far has almost completely been wiped out. US government bond prices continue rising, indicating that traders are prioritizing preserving capital in a flight to safety. The two-year Treasury note closed at its highest since late August.
Chart created in TradingView
As one may expect, the US Dollar gained broadly against the majority of its major counterparts given its status as the world’s most liquid currency. Similarly, the anti-risk Japanese Yen
