Stock markets did their best to fight the wave of negativity, but by sessions end, it was the bears who remained in control.

The focus lately has been on the swarm of negative headlines. That included the obvious trade wars which are pressuring risk assets, but it is also the ongoing Fed interest rate sagas.

President Trump continues to pressure the FOMC to cut rates and while markets expect them to do so, clearly they are frustrated with what is being said.

Importantly, it was also falling bond yields that spooked traders yesterday. The yield on the the US 10-year fell to 1.47% down 6 bps. This is stoking fears of an inverted yield curve, which is an early indicator of a recession in many instances.

As such GOLD remained well bid and has been back testing the $1550 level, however, we settled off the highs. The USD remains above 98.00 – but only just.

The SPX was off just -0.32%, but sentiment is clearly weak. Risk assets overall are on the back foot and haven’t been able to gain much traction. Really just holding off sharper losses.

Asian Market Outlook

It’s another quiet calendar in Asia today, with most of the attention on if the key pairs can follow through at all. The AUD/USD is bouncing a bit and is back trading above the 0.6750 level, but overall is weak. 0.6800 looks impassable at the present time.

The Yen is flat to open the session, while the Kiwi is not moving all that much yet.

Late yesterday, we saw a big draw in WTI, so that will be one to watch as the session unfolds. Given that it is fighting the risk-off sentiment at the moment. It is lower in early asian trade.