Market wrap: S&P 500 fell as much as -1.0% on N.Korea summit cancelled - Westpac
|Analysts at Westpac explained that the S&P 500 fell as much as -1.0% as President Trump announced that the 12 June meeting with North Korean leader Kim was cancelled, or at least postponed.
Key Quotes:
"Equities then trimmed losses to only a modest net decline, but risk barometers USD/JPY and the 10 year US treasury saw only small recoveries.
The US 10yr treasury yield fell from 3.01% to 2.95% - a two week low – then steadied at 2.97%. Two-year treasury note yields are down 8 basis points in 2 days, to 2.51%. Fed fund futures yields slipped another 1-2bp, but a June rate hike is still seen as effectively a sure thing, following the FOMC minutes.
EUR/USD rose from 1.1700 to 1.1750 then steadied with a small gain. The spread of Italian bond yields over Germany’s pushed out again towards 200bps as coalition leaders form their cabinet plans and continue to include strong Euro-sceptics as candidates for key posts.
USD/JPY fell from 109.75 to 108.96 – a two-week low – as the safe haven yen again outperformed. With some help from commodities such as iron ore, copper and gold, AUD/USD rose from 0.7550 to 0.7580. NZD ranged between 0.6910 and 0.6935. AUD/NZD ranged between 1.0915 and 1.0940.
GBP/USD reached its 1.3420 high after UK April retail sales surprised with a larger (+1.3%m/m ex fuel) rebound than expected (+0.5%m/m) from the slide (-0.5%m/m) in March. Annual retail sales volumes growth of 1.5% seems about in line with overall economic growth. The Office of National Statistics stated that looking through the volatility of Q1, sales show decided softening compared to 2017."
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