Global stocks dropped 1.3%. Developed markets tended to fare worse than developing markets. US shares fell 2.3%, erasing yesterday’s gains. Euro area stocks slipped 1.2%. Japanese shares ticked up 0.1%. Emerging market equities dropped 0.5% on the whole.
Italian sovereign yields inched up. The Italian 10-year yield rose 5bp to 5.64%. Yields mostly fell across the Euro area periphery. Greek, Irish, and Portuguese sovereign yields all fell. Spanish yields edged up; the 10-year Spanish yield increased 3bp to 5.08%.
Treasury yields mostly held steady. The yield on the 1m bill fell 2bp. The 1m yield has been negative at market close for the past fourteen sessions.
Brent crude reversed yesterday’s increase, falling 3.5% to $103.37/bbl.
The 3mo Euribor-OIS spread tightened 2bp to 73bp. VIX climbed 3%-pts to 40.6%.
The dollar gained 0.2% against the euro to 1.363$/EUR.
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J.P.Morgan
Global FX Strategy