Asian markets are sharply lower this morning, with the Nikkei and Hang Seng both down around 1.5%, on continuing concerns of slowing global growth. South Korea cut interest rates by 25bps, their first rate cut in 3 years, whilst Australian employment data came out worse than expected prompting a sharp move lower in the Aussie dollar. The BOJ kept their target rate but expanded their asset purchase fund to 25tn Yen.

Out of the US, markets were lower after minutes from the FED’s June FOMC meeting revealed that further stimulus was unlikely in the absence of further economic deterioration but maintained their cautious stance agreeing it was prepared for further action if required. So far this morning US futures are around another 40bps lower, whilst European equities are looking at declines of around 0.5%.

Out of Europe, the Finnish finance minister has said that Finland is not prepared to increase the size of the ESM and EFSF mechanisms, as part of options negotiated for Spanish aid. Auctions for 7.5bn Euros of Italian debt will take place this morning.

 

Posted by Philip Ball | Sales and Trading