Morning Auction: Continue

Guest walk on the floor of the New York Stock Exchange (NYSE) in New York, U.S., September 22, 2022. REUTERS/Brendan McDermid

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A preview of the day ahead in US and global markets by Alun John.

US investors deserve a little calm on Friday after a choppy week for the markets, although judging by the experience of their European counterparts, they may not have much luck.

The US data calendar for the day is calm, a relief at the end of a week in which the Federal Reserve raised rates by 75 basis points, as expected, but rocked markets with an outlook that gives food for thought, and the Japanese authorities made their first intervention in the foreign exchange market since 1998 to support the battered yen.

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A Japanese holiday on Friday and radio silence so far mean traders are hoping there will be no more news on this front today.

But market players who wake up in the United States still have something to digest at breakfast across the Atlantic.

Yields on UK government bonds rose the most in one day in 13 years, the pound slid to a new 37-year low against the dollar and stocks hit two-month lows after the UK Minister for Finance, Kwasi Kwarteng, announced a series of tax cuts in a bid to revive growth. Read more

Meanwhile, across the Channel, the euro fell to a fresh 20-year low and Germany’s DAX stock index (.GDAXI) slipped to its lowest since November 2020 after data showed that a slowdown in business activity in the euro area deepened in September.

Sharp interest rate hikes this week in the US, Britain, Sweden, Switzerland and Norway – among others – are still supporting the general risk-free mood, but the survey showing that the bloc’s economy is likely going into recession hasn’t helped. Read more

Turning to the US, S&P and Nasdaq (.SPX) futures are both down more than 1%, while the two-year US Treasury yield hit 4.2570%, lows last observed in 2007.

Buckle up, it doesn’t look like today is going to bring that much-needed rest.

It’s quiet on the US data release front today.

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Reporting by Alun John, editing by Catherine Evans

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The opinions expressed are those of the author. They do not reflect the views of Reuters News, which is committed to integrity, independence and non-partisanship by principles of trust.

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