Global Stocks, Oil Take Drubbing. Gold, Treasuries, Yen Soar…”Thank God China and Japan were Closed”
by Wolf Richter
WolfStreet.com
February 11, 2016
No wonder stock markets in the US are fidgety this morning.
Stocks in Europe have tanked, with the major indices down between about 2% and over 5% today, after negative interest rates were invoked again.
The central bank of Sweden cut its interest rate further, pushing it to minus 0.5%. Predictably, the Stockholm OMX stock index shed 3.5% in afternoon trading, down 27% from April last year.
And Swiss National Bank Chairman Thomas Jordan mused in an interview about cutting rates even deeper into the negative. The interest rate on sight deposits with the SNB is currently at a minus 0.75%. “We have already gone quite far with negative interest rates, and now we are observing the situation closely,” he said, and added, “We are ruling nothing out.” On cue, the Swiss SMI stock index dropped 3% in afternoon trading. It’s now too in a bear market, down 21% from August last year.
Everyone is waiting for the ECB to push its deposit rate deeper into the negative. It would do wonders for short sellers.
Thankfully, China’s markets remain closed due to the Lunar New Year holiday until Monday. So some totally unnecessary fireworks were averted. But there’s a convenient substitute, as investors try to play catch-up with the global rout this week: Hong Kong.
The Rest…HERE
