While the US dollar approached its peak for the year, bonds strengthened today, as the escalation of the Delta COVID strain uprooted concerns of inflation by investors and instigated a rush for less volatile assets.
European stocks were not left out as they recorded an increase in view of a meeting by European Central Bank scheduled for tomorrow. The meeting is expected to pass on a hesitant tone, even as the benchmark STOXX index of the locale’s 600 largest shares is up by 0.9%. During the previous seven-day period, available data reported an increase in the prices of consumer goods in June. This had instigated speculations that the US Federal Reserve could abruptly end its stimulus provisions to citizens.
According to reports, the talks surrounding whether price increases are temporary and vast apprehensions on the effect of the most recent COVID-19 escalation was responsible for an over 20-point drop in the U.S. 10-year yield within a seven-day period as retail and institutional investors have moved under the cover of less-volatile assets.
S&P 500 Drop 4%, South Korea Records New Virus Cases
The S&P 500 dropped by almost 4% from peaks previous Wednesday to abysmal levels on Monday before recovering. Optimism shown over European shares today stood out from a 0.13% fall in MSCI’s wider list of Asia-Pacific stocks outside Japan, as South Korea posted new COVID infections on a daily basis. Seoul’s KOSPI slid by 0.52% and Hong Kong’s Hang Seng index corrected by 0.4%.
Japan’s Nikkei posted a 0.6% increase after trading at a price similar to that of the last six months. The day before, traders bought cyclical stocks prior to the close of a seven-day period that will witness the start of the Tokyo 2020 Olympics games. Moreover, a leap in exports raised expectations for an economic healing led by exports. Chinese blue-chip stocks also went by 0.68%.
Yields of the US Treasury plunged beneath the low of the day before which stood at 1.209%, after prior gains on Wednesday, positioned at 1.205%. The two-year profit was at 0.198%, up from an initial close of 0.194%.
US Dollar Records Three-month Peaks
The US dollar remained near the three-month peaks today, reinforcing the concerns in the equities market over the high numbers recorded as COVID around the globe escalates.
Rob Carnell, Asia-Pacific chief economist at ING, noted that while a portion of the globe is disregarding the increasing spate of infections as immunization rates prevent new cases from worsening, there are a few regions that can thoroughly overlook this.
The last time, the dollar record moved by 0.2% at 93.161, with the Euro plunging by 0.2% to $1.1755. The dollar was 0.05% more solid against the yen at 109.89. Prices of Oil continue to drop after a bouncing back on July 20, as a report revealed a startling development in U.S. oil storage.
U.S. West Texas Intermediate crude dipped 0.42% to $66.93 per barrel and Brent exchanged at $69.07 per barrel, down 0.4% on a day-to-day basis. Meanwhile, Spot gold moved up marginally to $1810.4 an ounce as U.S. yields plunged from previous peaks.