Joined Nov 11, 2007
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Global Markets Get Hammered While U.S. Futures Erase Yesterday’s Gains on EM Volatility and Poor Data Out of Europe

“To cap a rough week, markets have fallen into “risk-off” mode once again this morning.

S&P 500 futures are down 0.8%, and have already completely erased yesterday’s big rally. Asian exchanges were mostly closed and European indices are getting hammered across the board.

Emerging-market currencies like the Turkish lira and the South African rand are tumbling against the dollar, and the dollar is sliding against the euro and the yen.

Meanwhile, gold and Treasury futures are turning in a strong performance.

The charts below show moves in various markets. Across the top from left to right are S&P 500 futures, the dollar-yen exchange rate, and the euro-dollar exchange rate. Across the bottom are gold futures, 10-year U.S. Treasury futures, and the dollar-lira exchange rate.

Major economic data releases this morning included unemployment out of the eurozone, which remained unchanged at 12.0%, and eurozone consumer price inflation, which came in at 0.7% year over year in December, below consensus expectations for a 0.9% rise.

The big surprise, however, was a 2.5% drop in German retail sales from the previous month in December, which is being cited as one driver of bearish sentiment this morning….”

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