Headlines:
- Equities slump in the opening hour in Europe
- UK July payrolls change 97k vs -9k prior
- ICYMI: China with three rate cuts in one day to try and bolster the economy
- The bond market remains a key driver of broader sentiment at the moment
- Critical juncture for gold as higher yields continue to weigh
- Japan finance minister Suzuki says rapid FX moves are undesirable
- Russia's central bank raises key interest rate from 8.5% to 12% in extraordinary meeting
Markets:
- EUR leads, AUD lags on the day
- European equities lower; S&P 500 futures down 0.5%
- US 10-year yields up 5.1 bps to 4.232%
- Gold down 0.3% to $1,901.09
- WTI crude down 1.0% to $81.69
- Bitcoin down 0.1% to $29,331
China was in the headlines once again, performing three rate cuts in one day to try and support the economy.
That didn't do much to help the risk mood though, as the mood soured once again in the opening hour of European morning trade. Regional indices opened with a steadier hand but quickly took a dive as US futures also bled lower from flattish levels earlier in the day.
The retreat in stocks comes alongside a continued push higher in bond yields, this time around being helped the UK jobs report. The wages numbers continue to run hot and that is stoking more hawkish expectations for the BOE to keep acting but the labour market figures itself were not too convincing.
That saw UK gilt yields shoot higher with Treasury yields following. 10-year Treasury yields are now up to 4.23% - its highest levels since November last year.
At the balance, the pound did move a little higher with cable nudging up from 1.2680 to 1.2720 before sticking around 1.2700 now. A slightly mixed dollar isn't really making things all too clear with EUR/USD itself up 0.3% to 1.0935 while AUD/USD is down 0.2% to 0.6470 from around 0.6500 earlier in the day.
If anything else, I'd continue watching the bond market for clues as we now turn the attention to the US retail sales data later.