Markets fall after Fed July Minutes
All three major indexes fell at close after the Fed July Minutes indicate that the willingness to start reducing asset purchases could start before the end of this year. The Dow closing lower by 1.08% and the S&P 500 followed suit by 1.07%. The Nasdaq composite also traded 0.89 %. lower. The 10 Year US treasury yields rose to 1.273 from 1.258% at 3PM ET after Fed minutes, ending the day at 1.242%. The U.S. dollar index was up 0.34% at 93.45, showing an increase in the value of the dollar after signs of tapering.
Asian stocks see losses for a second straight day after Wall Street’s response to Fed minutes indicating tapering to begin in a few months. China’s CSI 300 is down by 0.57%. Japan’s NIKKEI is down by 0.70%, currently trading at 27,394.43. In Hong Kong, the Hang Seng index was down by 1.6% trading at 25,442.91. Australia’s ASX is up by 0.51 %, currently trading at 6,995.00.
European stock markets are expected to open lower Thursday, amid concerns of the U.S. Federal Reserve tapering its bond-buying program this year, even as the world economy loses momentum.
The DAX in Germany traded 0.28% higher, CAC 40 in France dropped 0.73% and the FTSE 100 in the U.K. fell 0.16%.
The Russian stock market, which started trading on the positive side, ended Tuesday with a decline. The Moscow Exchange index dipped to the area of 3920 points, led by the recent favorites TCS Group. The Moscow Exchange index decreased by 0.45% and amounted to 3925.17 points. Quotes of Russian sovereign Eurobonds on Wednesday showed mixed dynamics against the background of insignificant valuable changes in US Treasuries. At the same time, sovereign spreads to the yield on underlying assets also remained virtually unchanged over the day. The price of Russian government Eurobonds maturing in 2030 decreased by only 4 basis points in relation to the close on August 17 and amounted to 114.97% of par, which corresponds to a yield of 1.47% per annum.
Oil prices fell for a sixth day, the longest losing streak since February 2020, as a spike in COVID-19 cases worldwide fueled fears over slower fuel demand while a surprise build in U.S. gasoline inventories added to pressure. Brent crude was down 87 cents, or 1.3%, at $67.36 a barrel by 0447 GMT, after touching the lowest since May 24 at $67.10 earlier in the session. U.S. West Intermediate crude (WTI) fell $1.05, or 1.6%, to $64.41 a barrel after falling to as low as $64.24, also the lowest since May 24.
WTI has dropped over 7% while Brent has slumped more than 5% during the six-day losing streak, the longest since a six-day decline.