Taking a dip


Equity markets wobble
Eurozone: On the canvas
United States: All good on the ground
Turkish: Whose side are you on?

Good morning,

Equities were hit hard yesterday in the worst session since July with every sector down at least 0.56%. Is this the big one? Seasoned investors in Silicon Valley are worried about a bubble in California, the real estate guys I spoke to in Torry Pines at the weekend were similarly spooked. The sell off yesterday seems to have been led by the weakness in the high yield credit markets, increasingly concerned about the timing of any future Federal Reserve rate hike. IT and financials performed the worst down 2.4% and 1.65% respectively.

While equities are selling off the USD is continuing to strengthen. The euro is trading at new lows, moving beyond our near-term target of $1.2750. The next technical objective is about a cent lower, but the key psychological level is $1.25. Draghi’s indication that additional unconventional measures can be adopted (from his speech earlier in the week) if necessary is not news.

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Global Macro-Daily Note 26th September 2014


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