It's setting up for a terrible start for Wall St at the opening bell
- S&P 500 futures -1.8%
- US 10-year yields down 2.2 bps to 2.892%
- Eurostoxx -2.1%
- Germany DAX -2.5%
- UK FTSE -2.4%
Risk will be the key trading theme to look out for in the session ahead as US markets reopen following the closure yesterday. It's very much a continuation of the beat down that we saw on Tuesday but things began here with reports that Huawei's CFO (founder's daughter) was arrested in Canada and due to be extradited to US for trial.
That put a dent on risk sentiment early on as it called into question whether or not this will dent the trade truce struck between Xi and Trump over the weekend. In European trading earlier, China delivered some upbeat comments on trade despite the Huawei case but the relief was short-lived.
E-minis recovered from being 1.5% lower to be down by about 0.7% but has now fallen back to lows of -1.8% on the day. In the currencies space, the Japanese yen is leading the way while commodity currencies are lagging behind as a result. Expect the same theme to play out as US markets open but for any turnaround in currencies today, the first signs will come from the US cash equity market so that will be the key asset class to focus on in trading later.
