1. This site uses cookies. By continuing to use this site, you are agreeing to our use of cookies. Learn More.

The US manufacturing activity setback prompted demand for safe haven

Discussion in 'Current Market Sentiments' started by fx-recommends, Jan 5, 2016.

  1. fx-recommends

    fx-recommends Content Contributor

    Aug 6, 2008
    Likes Received:
    The demand for safe haven assets could contain the market sentiment in the beginning of the new year with increasing worries about the manufacturing activity in US and china.

    Dec US ISM Manufacturing Index has come yesterday to show further falling to 48.2, while the market was waiting for improving to 49, after its first drop below 50 since May 2013 to 48.6 last November.

    Nov US construction spending came also yesterday to disappoint the markets by plunging by 0.4% m/m, while the consensus was referring to surging by 0.6%, after increasing by 0.3% in October.

    Dow Jones Industrial average loss exceeded 450 points during the first session of the year, before recovery by the end of the end of the day sent the index to close at 17,148.94 losing 276.09 only.

    The demand for safe haven sent the US Treasuries prices up to have lower yields during the US session but they could recover by the end of it with the equities prices recovery.

    At the end of the US session, UST 2YR yield lost only 0.015% to be now at 1.04%, UST10 YR came down by 0.031% reaching 2.24% and also UST 30YR yield retreated by 0.03% to come down below 3% psychological level to be trading on 2.99% yield currently.

    The market will be closely watching next the coming data from the labor market later this week, as another clue to the next movement of the Fed which raised its funds rate for the first time since 2006 by 0.25% on last Dec. 16 causing pressure on the equities market by expecting reaching 1.375% Fed fund rate by 2016 end.

    Have a good day

    Walid Salah El din
    Senior Market Analyst
    Skype : chief.economist.walid

    Tel: UK. +44 1138590277
    Mob: EGY. +20 1224659143

    To open your account at Trade-24 - Click here

Share This Page