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Jolted markets mark new 2019 milestones

Published 06/08/2019, 14:10
© Reuters. Traders work on the floor at the NYSE in New York
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By Ritvik Carvalho

LONDON (Reuters) - Global financial markets have been jolted in recent days by yet another escalation in a trade war between the United States and China, with the resulting selloff and bid for safety pushing assets and markers into new territory for the year.

The following graphics illustrate the key milestones and levels breached over the past few days:

1) VOLATILITY SPIKES

The VIX volatility index (VIX), also known as Wall Street's "fear gauge", marked its biggest one-day spike since October 2018 on Monday, as markets foresaw an extended period of price swings for stocks.

GRAPHIC: VIX records biggest one-day spike in 10 months - https://tmsnrt.rs/2MI5pvF

2) GLOBAL STOCK SELLOFF INTENSIFIES

MSCI's All-Country World Index (MIWD00000PUS), which tracks shares across 47 countries, fell for a six straight day on Monday - marking its longest losing streak this year. The index is down about 6% from its 2019 peak.

GRAPHIC: Global stocks mark longest losing streak in 2019 - https://tmsnrt.rs/2YxYMDu

3) U.S. STOCKS' WORST DAY

The S&P 500 (SPX) index of U.S. stocks suffered its worst day in 2019, falling almost 3%. Monday was its worst day since Dec. 4 last year.

GRAPHIC: S&P 500 index suffers worst day of 2019 - https://tmsnrt.rs/2MIicOQ

4) YIELD CURVE INVERSION DEEPENS

The inversion of the U.S. 3-month to 10-year yield curve deepened further to around -30 basis points, its most negative since 2007 on Monday. The inversion of yield curve is widely seen as a reliable predictor of impending economic slowdowns. (US10YT=RR) (US3MT=RR)

GRAPHIC: U.S. yield curve at most negative since 2007 - https://tmsnrt.rs/2MR355N

5) CHINESE YUAN BREACHES KEY LEVEL

The Chinese yuan fell below the key psychological level of 7 yuan to the dollar for the first time in 11 years on Monday as Chinese authorities allowed the currency to depreciate in the wake of the fresh round of U.S. tariffs.

GRAPHIC: Yuan falls past key level for first time since 2008 - https://tmsnrt.rs/2YtGy61

6) EMERGING FX 2019 GAINS WIPED OUT

MSCI's emerging market currency index (MIEM00000CUS) wiped out all its gains for the year on Monday as the yuan's fall dragged down other emerging market currencies such as the Korean won and the New Taiwanese dollar with it.

GRAPHIC: MSCI EM currency index wipes out all gains for the year - https://tmsnrt.rs/2YsK2FD

7) BOND YIELDS SINK FURTHER INTO NEGATIVE TERRITORY

European sovereign debt yields continued to sink into sub-zero territory, with Irish 10-year government (IE10YT=RR) the latest to go negative on Monday, along with 30-year Dutch government debt (NL30YT=RR). The entire German, Danish, Swiss and Dutch yield curves are now in negative territory.

GRAPHIC: Sovereign bond yield heatmap - https://tmsnrt.rs/2YoUJZY

8) GOLD HITS 6-YEAR PEAK

Gold hit a six-year high on Monday as the bid for safe haven assets gave the precious metal a boost.

© Reuters. Traders work on the floor at the NYSE in New York

GRAPHIC: Gold hits 6-year peak - https://tmsnrt.rs/2MLiiVJ

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