The ASX is heading for a rough end to the week on Friday after a volatile night on global markets on Thursday.
Oil prices plunged in their biggest single-day fall so far in 2019, US Treasury bond yields fell sharply as well and Wall Street sold off – the reason – a combination of continuing fears about the various trade wars Donald Trump is waging against China, Europe, and Japan, worries about weaker than expected demand and no sign of any change in the Fed’s wait and hold stance on interest rates.
Oil fell to the lowest since late March, but gold rose, with its best day for a month or more.
European and Asian markets had earlier sold off with falls of 1% to 2% common.
The Aussie dollar was trading around 69 US cents in early Asian dealings.
Of all the issues it’s the trade tussle with China that is starting to have a very real impact as investors start to realise that Donald Trump doesn’t care about collateral damage to companies and traders from his trade assault on China.
The S&P 500 fell 1.2% to finish at 2,822.24; the Dow shed 286 points, or 1.1%, to end at 25,490.47 and the Nasdaq Composite lost 1.6% to finish at 7,628.28.
The closings were all above the day’s lows, but that was probably the only positive from a tough day’s trading.
The stock-market worries and the fall in bond yields fuelled each other.
The 10-year Treasury yield fell to around 2.30%, its lowest level since October 2017. They closed at 2.32%.
Australian 10 year yield was around 1.58% this morning, a record low.
Oil futures sold off with futures prices for West Texas Intermediate oil plunging 5.7% to $US57.91 a barrel, its biggest drop for the year.
Global benchmark July Brent futures fell $US3.23, or 4.6%, to $US67.76 a barrel the lowest level since March 25, according to market data.
Oil prices were dragged lower by an unexpectedly large rise in US oil stocks which are now at their highest level since late 2017.
Worries about retailers continued and saw shares in Best Buy, the US consumer electronics group fall 4.8% despite producing better than forecast quarterly results.
Comex June gold jumped $US11.20, or 0.9%, to settle at $US1,285.40 an ounce, on for the highest most-active contract settlement since May 16. The rise had been trimmed to $US9 an ounce in early trading in Asia on Friday morning.
The ASX will start weak with the overnight futures market signaling a 20 to 30 point loss to go with yesterday’s 19 points or 0.3% dip in the ASX 200.
