The global market is full of sorrow and gloom. The US economic data is poor ...
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Global markets were unsettled on Friday as poor U.S. economic data battered U.S. stock markets, prompting investors to bet that the Federal Reserve (FED/Federal Reserve) might reverse its tightening policy trend by the end of the year.
The doubts that the Sino-US trade war has dragged down global economic growth dragged down risk-sensitive assets in 2018, led to volatility surge and led to major stock markets falling sharply.
These fears have found some basis this week. Apple (AAPL.O) lowered its revenue forecast for the first time in nearly 12 years, blaming weak sales of the iPhone in China. Its share price plunged nearly 10% on Thursday.
The Institute for Supply Management (ISM) also released disappointing survey data on Thursday, showing that manufacturing activity in the United States slowed more than expected in December.
The report prompted investors to buy bonds for hedge. The yield on two-year Treasury bonds in the United States fell below 2.4%, the first time since 2008 that it has been on par with the effective rate of the Federal Fund.
U.S. three-and five-year bond yields hit even lower levels, an inversion that used to herald recession. The yield on 10-year bonds fell to 2.55% and hit a high of 3.25% in November.
The decline in yields on U.S. Treasuries put the dollar on the defensive. The dollar plunged to a nine-month low of 105.25 against the yen on Thursday, driven by technical factors in light holiday trading.
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