Stocks drop, Chinese yuan tops 7.2 against the dollar

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– Weezin Tan

The offshore and inbound Chinese yuan has breached 7.2 against the dollar, hovering at its weakest level since early 2008.

The US dollar index also strengthened 0.33% to trade at 114.47.

Consumer inflation excluding fresh food is likely to rise this year, but the rate of increase will then slow on energy prices, minutes from the Bank of Japan in July meeting said.

A few members also said that inflation, excluding fresh food and energy, was unlikely to reach 2% during the forecast period. The CPI reading was 1.6% in August.

“These members expressed the view that unless commodity prices continue to rise, the rate of CPI inflation is expected to decline from fiscal year 2023 onwards,” the minutes said.

On the yen, a member of the Bank of Japan board said that downward pressure on the currency could be eased if the slowdown in the global economy lowers inflation and interest rates worldwide.

Another member said that the yen could rise even if the global economy experiences shocks.

– Abigail Ng

Neil Fitch, chief investment officer at Edinburgh-based SVM Asset Management, says he expects the overall landscape to remain “extremely challenging” for the rest of the year.

Talking to CNBC Pro . Talks Last week, Fitch named the main drivers that could help the stock market turn “more positive” and shared his view on growth versus value.

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– Xavier Ong

The Dow and S&P 500 have fallen for six days in a row, with many of those who saw a broad sell-off seen typical of the so-called “crash” days.

This can sometimes be a conflicting buy signal on Wall Street, but many investment professionals are skeptical that the selling is over. One reason is that earnings forecasts for next year still show solid growth, which is unlikely in the event of a recession.

said Andrew Smith, chief investment strategist at Delos Capital Advisors in Dallas. “But I find it hard to reconcile in my mind that the earnings story is going to be as good as we expect.”

In addition, dramatic moves in the bond and currency markets mean that something has “broken” and it may be smart to wait for that information to wear off, Smith said.

On the positive side, Smith cited a strong labor market and signs of continued travel spending as a sign that the US economy may be able to avoid a major recession.

– Jesse Pound

The The 10-year Treasury yield is approaching 4%, A level untouched since 2010.

The United States 10 years It is the standard yield that determines the course of rates for mortgages and other consumer and business loans. Its price rose this week, as UK bond yields race upwards and expectations of a strong Federal Reserve.

The yield was 3.96% in afternoon trading. 10-year bond yields reversed earlier declines and gained about basis points. (Base point is 0.01 percentage point)

“It was definitely impressive, and I think no one yet is willing to step in and grab the falling knife,” said BMO’s Ben Jeffrey. He added that the lack of liquidity also led to higher yields, which led to the opposite price move.

Jeffrey said yields are also rising ahead of the 5-year bond auction at 1pm.

He said 10 years tested the 4% level in 2010. “The last time we were sustainably above 4% was 2008. Another technical level is at 4.10% and then there isn’t a lot of observation until 4.25%,” he said.

– Patty Doom