U.S. Treasury yields and the dollar dropped to seven-month lows on Tuesday and world stocks slid as political uncertainty from the United States to the Middle East and weakness in commodity markets pushed investors away from risky assets.
The yen and gold also gained amid prevailing caution as an Arab rift opened up around Qatar, and ahead of testimony from the former head of the FBI, a British election and the European Central Bank’s next move which all happen on Thursday.
Wall Street was expected to open around 0.3 percent lower ESc1 for what would be a second day of losses after both European and Asian stocks had fallen during their sessions.
The dollar, meanwhile, was at its weakest since November against other top world currencies .DXY as U.S. government bond yields US10YT=RR fell below 2.15 percent, their lowest since Donald Trump’s election last year.
“We’ve had a little bit of a cooling off in equities following the breaking of links with Qatar – a lot of people think it may force oil prices lower and remove some of the inflationary pressures,” said RBC economist Cathal Kennedy.
“As those pressures ease, it pushes out the horizon for interest rate rises.”
On what BayernLB analysts called “Super Thursday”, British voters will also go to polls in an increasingly unpredictable general election, the European Central Bank is due to meet and later the same day and former FBI director James Comey will testify before Congress.
“We have a big week or so ahead of…Read More