September 9: Overnight Market Wrap

September 9: Overnight Market Wrap

Key Points:

Nasdaq falls 4.11% dragging other indices lower

UK threatens to break international law over Brexit deal

AstraZeneca Covid vaccine phase 3 trial on hold due to adverse reaction

The stock market rout that started last week having paused over the US holiday re-emerged yesterday with all three major US indices hit hard. The Dow Jones and S&P500 well over 2% down but as to be expected the Nasdaq took the biggest hit down 4.11% and now considered to be in ‘correction’ territory. Tesla lost over 21% on the day. The USD benefitted as markets focussed back on China/US, China/Australia tensions, Brexit and further new Covid cases across Europe and the US. Oil fell back to close below $37 as demand is showing signs of waning adding to the strain on the loonie with USD/CAD back at 1.3250 from 1.30 last week. AUD tried a quick spike on the European open from 0.7280 to 0.7310 but was met with a wave of selling that has seen it test 0.7192 so far. Cable was the worst performer as once again the UK government seem intent in completely destroying the economy by reneging on the Brexit deal signed in December. After a number of gaffes relating to Covid earlier in the year, news out recently that there are plans to introduce a night curfew and limit gatherings to a maximum of 6 people are likely to weigh on any economic growth and the path for GBP going forward is bleak. News that the Oxford/AstraZeneca trials are to be put on hold has also given risk assets a kick. Gold plunged from 1940 to 1906 with USD strength but became a risk holding asset and turned back north to retest 1940 before closing at 1929 down $4 on the day. Chinese CPI is due out today unlikely to stir markets with all eyes on Asia reaction to the overnight sell off in the US. Tonight the BoC will announce their rate decision with expectation that they will leave things as they are as recent data has been promising.

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