"Embracing the bear market" in US stock market indices

After the daily candles of the main indices of the US stock market formed a classic “bear market embrace” on Thursday, it could have been expected that the situation on the stock exchanges in Asia and Oceania as well as in Europe will deteriorate significantly today. And indeed, initially the Japanese Nikkei 225 lost more than 2 percent. However, the loss was later reduced to just -0,4 percent.

The Bank of Japan kept its value today interest rate at -0,1 percent., but decided that the level of unconditional defense of yields for Japanese 10-year bonds will be increased from 0,50% to 1,0%. As a result, the yield on 10-year Japanese government bonds rose today to its highest level since 2014, above 0,55 percent.

On the WSE with minimal declines

In European stock markets, the impact of yesterday's sharp pullback in US stock prices was not too severe this morning (DAX -0,15%, CAC 40 -0,36% approx. 9:20). The Spanish IBEX 35 was again the highest since February 2020 today.

Also on the WSE, Friday's session started with minimal declines (WIG-20 -0,1 percent around 9:40 am).

US 10-year Treasury bond yield tried to get back below 4% this morning. (4,007 percent approx. 9:30). The yield of 10-year Polish government bonds rose today in the morning to the highest level in a week (5,481%).

Strong fluctuations in pairs with the yen

Courses EUR / USD dropped yesterday below 1,10, and today at approx. At 9:25 it was losing a further 0,17 percent. The USD/JPY exchange rate fluctuated very strongly today, but at approx. 9:25 tried to stabilize at yesterday's close.

Slightly Polish zloty weakened this morning (EUR/PLN +0,19%, USD/PLN +0,36%).

The Bitcoin exchange rate against the US dollar, which on Monday broke sharply down from the monthly "head and shoulders" pattern and made a "return move" on Tuesday and Wednesday, resumed its decline yesterday (-0,98%), and this morning it was stable (+0,01 percent around 9:30).

Contract prices for oil, which hit a 3-month high yesterday, was little changed this morning (WTI -0,07 percent, Brent -0,12 percent around 9:20 am). After yesterday's stronger declines on Friday morning there was no dominant trend in the metals market (gold +0,25%, copper +0,64%, silver -0,24%, platinum -0,07%, palladium -0,69%). Wheat and soybean contracts fell this morning, and cotton tried to make up for yesterday's over 4 percent. decrease.

Source: Łukasz Zembik, OANDA TMS Brokers