Egypt Daily News – The global financial markets have experienced a significant collapse, driven by investors’ shift towards safe-haven assets in response to disappointing US jobs data released last week.
The weaker-than-expected employment report has intensified concerns that the Federal Reserve may have miscalibrated its monetary policy by keeping interest rates unchanged, potentially signaling an impending recession in the US economy.
As a result of these anxieties, stock sales have escalated, compounded by fluctuations in key earnings reports and tightening measures from the Bank of Japan.
This adverse market sentiment led to a strong performance of the Swiss franc, which appreciated 1.2% against the dollar, reaching its highest level since January.
Treasury bond yields in the US also fell, indicating a flight to quality, with the yield on 10-year bonds declining to its lowest levels in a year. In contrast, US stock futures plummeted, showing significant drops across major indices, including a decline of about 600 points in the Dow Jones Industrial Average futures.
In Asia, the Nikkei index saw a dramatic fall of 12.4%, marking its worst day since “Black Monday” in 1987. European markets mirrored this bearish sentiment, with the STOXX 600 index down by 2.54%.
Despite these challenges, some analysts, like Peter Shavrik of RBC Capital Markets, suggest that a closer analysis of the jobs report reveals complexities that should not be overlooked. He also predicts that the overall economic data could lead the Fed to consider a modest reduction in interest rates in September.
However, the ongoing fears of a US recession continue to weigh heavily on the global economy, creating a climate of uncertainty.
