Global Stocks Experienced A Decline And The Yen Strengthened As Market Volatility Continued To Dominate.

London and Tokyo – European stocks experienced a decline and U.S. futures slipped on Thursday following turbulent sessions in Asia and on Wall Street. Investors are struggling to find their footing in a wild week for markets.

The yen and U.S. bonds rose as traders anxiously awaited U.S. weekly jobless claims data. After weak employment numbers sparked Monday’s market rout, this data has taken on extra significance.

In early trading, Europe’s continent-wide Stoxx 600 index fell by 1 percent. This decline followed its 1.5 percent climb on Wednesday. Germanys DAX index was also down by 0.6 percent and Britain’s FTSE 100 dropped by 1.1 percent.

Futures for the U.S. S&P 500 were down by 0.4 percent. The index had fallen by 0.8 percent the previous day after giving up gains of as much as 1.7 percent in morning trading.

Erik Nelson, a macro strategist at Wells Fargo, commented on the current state of the market, saying, “When you have a volatility shock like this, and you have a degree of unwind in certain positions, you’re very prone to sudden reversals and a degree of uneasiness as the adjustment continues. I would be surprised if we just went back to everything being fine.”

Japan’s Nikkei share index experienced swings from early losses of as much as 2.5 percent to gains of 0.8 percent before ultimately finishing 0.7 percent lower.

Stocks have tumbled due to weak U.S. jobs data last week, a dramatic rally in the Japanese yen, and concerns about an artificial intelligence bubble.

Since hitting a 38-year low in July, the yen has surged by 11 percent. This surge has been fueled by intervention from authorities, a surprise rate hike by the Bank of Japan, and a U.S. jobs slowdown that has weighed on the dollar.

Investors have been forced to dramatically unwind carry trades, which involve borrowing cheaply in Japan to buy dollars and other currencies to invest in higher yielding assets such as bonds and tech stocks. This has contributed to a 12 percent plunge in Japanese stocks on Monday.

The minutes released on Thursday revealed a hawkish slant among the board of the Bank of Japan. However, Deputy BOJ Governor Shinichi Uchida played down the chance of another near-term hike.

The U.S. dollar index was down by 0.2 percent at 102.93 after reaching an eight-month low of 102.69 on Monday. The euro and the pound both saw slight increases.

The yield on the benchmark 10-year U.S. Treasury note was last down 6 basis points at 3.909 percent. On Wednesday, it rose following a weak debt auction. Yields move inversely to prices.

“During recent volatility episodes, the promise or pricing of aggressive Federal Reserve rate cuts has proven to be as effective as actual rate cuts via the loosening in financial conditions,” said Tony Sycamore, an analyst at trading platform IG.

Traders on Thursday expected around 110 basis points of cuts from the Federal Reserve this year. The weekly U.S. jobless claims data at 12:30 GMT (8:30 a.m. ET) could potentially shift those expectations.

Crude oil remained flat after rising the previous day due to data showing a bigger-than-expected drawdown in U.S. crude stockpiles.

Brent crude futures showed a slight increase of 0.1 percent, reaching $78.42 a barrel. On Monday, it hit an eight-month low of $75.05 a barrel.


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