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Forex Flash: US equity markets in peril surrounding fiscal cliff – NAB

By FXstreet.com,  December 28, 2012, 04:16:00 AM EDT

FXstreet.com (Barcelona) - In the United States, equities continued to weaken amid deepening pessimism that a deal to avoid the worst excesses of the fiscal cliff can be put in place before year end. This followed comments from Senate majority leader Harry Reid that "it looks like that (over the cliff) is where we're headed".

The S&P 500 was down over 1% with more modest losses averaging 0.6% for the DJIA and NASDAQ. According to the NAB Research Team, news that the US House of Representatives will convene on Sunday evening has since seen more than half the losses in the S&P reversed and the DJIA and NADAQ now almost flat heading into the close.

Meanwhile, US Treasuries attracted another safe haven bid with 10-year yields -4bp to 1.71%, but this has done doing nothing to arrest yen weakness. The USD/JPY is up a further 0.4% to trade above Y86 for the first time since mid-August 2010. The VIX jumped above 20 for the first time since mid-July, up to 20.0 at one point from 19.5 at Wednesday's close, before easing back to the 20.50 level.




The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.


This article appears in: Investing, Forex and Currencies

Referenced Stocks:



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