Futures pointed lower in Hong Kong, Japan, and Australia in the wake of a hawkish pivot by the Federal Reserve. The Nasdaq lost 0.9%. The Dow Jones index and S&P 500 each lost by 1.6% and 1.3% respectively.
The flattening in the Treasury yield curve is a sign of the retreat in reflation trades. US 10-year yields fell by 7 points to 1.44% and short-term US 2-year yields rose by 4 points to near 0.25% after remarks made by the Fed official James Bullard on potential inflation risk that may warrant a higher interest rate next year.
Forex trading saw the greenback advanced against other major currencies. According to ZERO Markets’ Meta Trader 5 platform, the Euro fell from highs near $1.1923 to lows near $1.1846 against the dollar. The Aussie dollar fell from highs near $0.7549 to lows around $0.7475 against the dollar at US close. The dollar is holding steady on Monday morning.
Commodity trading saw crude oil prices rose on Friday. Crude posted a fourth straight weekly gain after OPEC sources on limited US oil output. Brent crude rose by 0.6% to near $US73.5 a barrel. WIT rose 0.8% to near $US71.64 a barrel.
Iron ore prices lost 1.6% to near $217.3 a tonne. Precious metals trading saw gold stabilized after sliding to near $1769 an ounce.
Key events this week (Economic Calendar):
- Australia Preliminary Retail Trade Data (Monday)
- Bank of England rate decision (Thursday)
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