January 29, 2014
Global stock markets and emerging market currencies have gone from gains to losses in the span of the morning.
Efforts by emerging market central banks to stem the bleeding have already failed, as traders have faced rate hikes in Turkey and South Africa.
S&P 500 futures are down nearly 1.0% heading into the start of North American trading. The U.S. dollar-Japanese yen exchange rate is also falling sharply, indicative of fears over global liquidity.
Meanwhile, 10-year U.S. Treasury futures are rallying, currently up 0.3%. The yield on the 10-year Treasury note is 2.71%, down 4 basis points from yesterday’s close, and gold futures are up 1.3%, trading at $1,267 an ounce.
The charts below show the action in various markets. Across the top from left to right are S&P 500 futures, the dollar-yen exchange rate, and the euro-dollar exchange rate. Across the bottom from left to right are gold futures, 10-year U.S. Treasury futures, and June 2016 eurodollar futures.
Last night, the Central Bank of the Republic of Turkey announced massive rate hikes at the conclusion of an emergency meeting to shore up the Turkish lira, which has been plummeting to new all-time lows over the past several trading sessions. The lira surged on the announcement, but has since given up all of its gains and then some.
This article was posted: Wednesday, January 29, 2014 at 12:19 pm