On Friday morning, most Asian stock markets traded in red, but the losses were somewhat smaller than in the U.S. It looks like the Nikkei is holding up slightly better than the other Asian markets. as it was only down around 0.5%.
While Fed worries had an impact on market sentiment, it is also clear that Chinese fears play a major role in the market downturn.On Thursday, the Chinese one-day repurchase rate rose to close to 14% on fears of tightening of Chinese liquidity conditions. That is hardly good news for Chinese growth.
In the currency markets the 'risk off' trade dominates - Emerging Markets' currencies continue to be under pressure, while the dollar has surged. Commodity prices continue to drop.
The story is still the same in the fixed income markets, and U.S. bond yields continued to rise. Higher U.S. yields pushed up Japanese and European bond yields.
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