August 06, 2024 at 04:21AM
A dead cat bounce? It’s too early to say anything when we’re just settling down after an extremely volatile period in markets. Bid-ask spreads are still adjusting and sentiment is still very much in a fragile state. But for now at least, there is some minor relief after the turbulence since Friday.
Nikkei +9.4%
S&P 500 futures +1.4%
Nasdaq futures +1.9%
Dow futures +0.9%
US 10-year yields +5.6 bps to 3.839%
USD/JPY +0.8% to 145.27
USD/CHF +0.3% to 0.8551
Even the close yesterday was not as bad as one would think after all the fear and exaggeration at the start of the day. The Nasdaq closed down by 3.4% but it still ended closer to the highs than the lows traded during the session.
That said, the wounds are still very fresh across markets currently. It won’t take much to reopen them at this point. And the thing about the unwinding of carry trades or deleveraging pain as some would call it, is that they can come in stages.
But for now, the US ISM services report here and some calmer tones from the Fed’s Goolsbee and Daly perhaps is helping to provide a bit of reprieve to broader market sentiment. Well, at least until the next wave comes along.
This article was written by Justin Low at www.forexlive.com.
