LONDON (Reuters) – Global financial markets have been jolted in recent days by yet another escalation in a trade war between the United States and China, with the resulting selloff and bid for safety pushing assets and markers into new territory for the year.
FILE PHOTO: Traders pause for a moment of silence for victims of recent gun violence, in Dayton, El Paso and Gilroy, on the floor at the New York Stock Exchange (NYSE) in New York, U.S., August 5, 2019. REUTERS/Brendan McDermid
The following graphics illustrate the key milestones and levels breached over the past few days:
1) VOLATILITY SPIKES
The VIX volatility index .VIX, also known as Wall Street’s “fear gauge”, marked its biggest one-day spike since October 2018 on Monday, as markets foresaw an extended period of price swings for stocks.
(GRAPHIC – VIX records biggest one-day spike in 10 months: tmsnrt.rs/2MI5pvF)
2) GLOBAL STOCK SELLOFF INTENSIFIES
MSCI’s All-Country World Index .MIWD00000PUS, which tracks shares across 47 countries, fell for a six straight day on Monday – marking its longest losing streak this year. The index is down about 6% from its 2019 peak.
(GRAPHIC – Global stocks mark longest losing streak in 2019: tmsnrt.rs/2YxYMDu)
3) U.S. STOCKS’ WORST DAY
The S&P 500 .SPX index of U.S. stocks suffered its worst day in 2019, falling almost 3%. Monday was its worst day since Dec. 4 last year.
(GRAPHIC – S&P 500 index suffers worst day of 2019: tmsnrt.rs/2MIicOQ)
4) YIELD CURVE INVERSION DEEPENS
The inversion of the U.S. 3-month to 10-year yield curve deepened further to around -30 basis points, its most negative since 2007 on Monday. The inversion of yield curve is widely seen as a reliable predictor of impending economic slowdowns. US10YT=RR US3MT=RR
(GRAPHIC – U.S. yield curve at most negative since 2007: tmsnrt.rs/2MR355N)
5) CHINESE YUAN BREACHES KEY LEVEL
The Chinese yuan CNY= fell below the key psychological level of 7 yuan to the dollar for the first time in 11 years on Monday as Chinese authorities allowed the currency to depreciate in the wake of the fresh round of U.S. tariffs.
(GRAPHIC – Yuan falls past key level for first time since 2008: tmsnrt.rs/2YtGy61)
6) EMERGING FX 2019 GAINS WIPED OUT
MSCI’s emerging market currency index .MIEM00000CUS wiped out all its gains for the year on Monday as the yuan’s fall dragged down other emerging market currencies such as the Korean won and the New Taiwanese dollar with it.
(GRAPHIC – MSCI EM currency index wipes out all gains for the year: tmsnrt.rs/2YsK2FD)
7) BOND YIELDS SINK FURTHER INTO NEGATIVE TERRITORY
European sovereign debt yields continued to sink into sub-zero territory, with Irish 10-year government IE10YT=RR the latest to go negative on Monday, along with 30-year Dutch government debt NL30YT=RR. The entire German, Danish, Swiss and Dutch yield curves are now in negative territory.
(GRAPHIC – Sovereign bond yield heatmap: tmsnrt.rs/2YoUJZY)
8) GOLD HITS 6-YEAR PEAK
Gold XAU= hit a six-year high on Monday as the bid for safe haven assets gave the precious metal a boost.
(GRAPHIC – Gold hits 6-year peak: tmsnrt.rs/2MLiiV)
Reporting by Ritvik Carvalho; Editing by Frances Kerry