On Wednesday, January 3, bets of global interest rate cuts weakened, and overseas stocks and bonds got off to an unfavorable start. U.S. Treasury and U.S. stock futures extended losses, with Nasdaq futures falling more than 0.6% and the 10-year Treasury yield approaching 4%.
U.S. manufacturing, job openings data and the minutes of the Federal Reserve's FOMC policy meeting will be released, and traders are awaiting data to better understand whether a sharp rate cut is being priced in. Swap pricing shows that the Fed cut rates by about 145 basis points during the year.
Most analysts believe that the minutes of the Federal Reserve's December meeting will most likely pour cold water on investors. Karl Steiner, head of analysis at Skandinaviska Enskilda Banken AB, does not expect the discussion in the minutes to support such a large rate cut, and the market will be watching closely for any talk of a rate cut, what factors will trigger a rate cut, and how soon it will come.
Gold fell below the 2050 mark
Spot gold fell below the $2,050 per ounce mark to $2,040 per ounce, down about 0.9% on the day.
European and U.S. stock markets fell
European stocks extended their losses, with the German DAX index falling 1% during the day, the French CAC 40 index falling 1.5%, the Euro Stoxx 50 index falling more than 1%, and the British FTSE 100 index falling 0.65%.
U.S. stock futures were lower, with Nasdaq 100 futures extending losses to 0.6%, Dow futures down as much as 0.3%, and S&P 500 futures down as much as 0.4%. Nvidia fell more than 1.6% premarket as investors continued to retreat from tech stocks.
U.S. Treasuries continued to retreat
Treasuries fell for the fourth day in a row, with the 10-year Treasury yield rising to 3.98%, approaching the 4% mark and the highest level since Dec. 14, reflecting investors' cautious approach ahead of new economic data and the release of the Federal Reserve minutes. The U.S. dollar strengthened for the fourth day in a row, its longest since November.
Long-term UK bonds were also hit harder, with the yield on 30-year UK bonds rising 14 basis points, higher than their US and German counterparts. Investors are selling long-end gilts in order to free up cash before the UK sells new debt at higher interest rates.
International oil prices rose in the short term
WTI crude rose $0.51 per barrel to $70.92 a barrel in five minutes, while Brent crude rose $0.52 to $76.59 a barrel in five minutes, rising to an intraday high.
On the news side, it was previously reported that Yemen's Houthi rebels said they had successfully attacked a container ship bound for Israel. In addition, there is information that Libya's largest oil field has begun to shut down due to protests.
Bitcoin plunges 7%
Cryptocurrencies generally fell, with Bitcoin falling more than 7% at one point and Ethereum falling 8% at one point. Bitcoin had broken through $45,000 the day before, hitting a 21-month high, and institutions said that short-term bitcoin volatility would intensify.
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