15 October 2018
Bassanese Bites: Seeking stability – Week beginning: 15 October 2018
The highlight of the past week was the sell-off in global equities, which seemed a delayed reaction to the surge in US bond yields one week earlier. As it turned out, US bond yields eased back somewhat last week as the “risk-off” trade took its toll on equities. The $US has largely moved sideways through the mayhem, with gold catching a small “flight to safety” bid. Local stocks sold off also, with the S&P/ASX 200 Index dropping back below 6000.
Note there were few new fundamental drivers of last week’s equity sell-off, with the US CPIresult actually surprising to the downside (with core annual inflation holding at 2.2%). Even Trump’s latest incendiary comment that the Fed “was out of control” did not shock the market – which has learned to take what he says with a grain of salt. Not helping is the fact that the US and China seem no closer to a trade deal, but this has been the case for sometime.
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