Here are the top five things you need to know in financial markets on Friday, June 10:
1. Global stocks are risk off ahead of key events
Investors appeared reluctant on Thursday to add to positions in equities with nerves on edge ahead of key events such as meetings by the Federal Reserve (Fed) and Bank of Japan next week and the June 23 referendum on the U.K.’s membership in the European Union the following week.
With Chinese markets closed for a holiday on Friday, Asian stocks were weaker.
European stocks traded sharply lower as concerns over the region’s growth continued to weigh.
After putting an end to a three-day stretch of gains in the prior session, U.S. futures were pointing to yet another leg down on Friday. Specifically, at 9:59AM GMT, or 5:59AM ET, the blue-chip Dow futures shed 0.50%, S&P 500 futures traded down 0.63% and the Nasdaq 100 futures fell 0.74%.
2. German bund yield hits new record low amid a possible “supernova” set to explode
The flight from equities saw money poor into fixed income with safe-haven German 10-year bonds falling yet again to an all-time low of 0.021% on Friday.
Some experts were considering that the German bund yield could hit negative territory which would mean investors would actually pay the government to lend it money.
Bond guru Bill Gross warned that global yields were the lowest in 500 years of recorded history with $10 trillion of negative rate bonds.
“This is a supernova that will explode one day,” he said.
3. Consumer sentiment on tap
Even though the Fed was not expected to tighten monetary policy at their June 14-15 meeting, market participants were still looking ahead to data to show the state of the consumer as a key factor for growth in the U.S. economy.
The University of Michigan will release the preliminary read of consumer sentiment in June at 14:00GMT, or 10:00AM ET.
This will be the second-to-the-last reading on consumption ahead of the May retail sales out on the June 14.
4. Gold edges down, holding near 3-week highs
Gold had recently been benefiting from the flight to safe haven assets and was on track for a second weekly rise.
Investors began to pour into the precious metal after last Friday’s job report showed extremely weak job creation.
Nevertheless, traders took profit on Friday with a higher dollar adding some downward pressure. On the Comex division of the New York Mercantile Exchange, gold futures for August delivery declined 0.34% to $1,268.25.
5. Stronger dollar weighs on crude
A stronger dollar weighed on oil prices on Friday, pulling black gold from an 11-month high despite continued supply disruptions and evidence of high demand.
U.S. crude oil futures lost 1.54% to $49.78, at 10:00AM GMT, or 6:00AM ET, while Brent oil traded down 1.37% to $51.24.