Stocks fell sharply on Friday, reversing earlier gains, on the back of a very disappointing U.S. jobs report; Earlier on Friday, gold was down for the sixth consecutive trading day and looked like it would be heading further lower.
We are seeing wild price swings in crude oil due to Hurricane Joaquin. While oil has plenty of reasons to rally other than the storm, like declining oil output and increased geopolitical risk, the track of the storm seemed to encourage a selloff.
Investors pulled a combined $75 billion from U.S. and emerging market equity funds in the third quarter, wiping a record $10 trillion off the value of global equities in the period, according to EPFR Global and Bank of America Merrill Lynch
Red December 2016 Eurodollar (EDZ6) trades flat on the day following the jobless claims data. Price action was muted yesterday, which is consistent with pre-employment report trade. Open interest rose modestly across the Eurodollar curve (+18K) but was slightly lower for EDZ6 (-2k). The yield curve flattened with the first three years falling 1.5 bps and the last three years rising 1 bp.
Crude oil is up because production is down. We are also getting a boost from better than expected manufacturing data in China and the increased risk geopolitical risk premium because of Russia's actions in the Ukraine.
China issued detailed rules on Wednesday allowing foreign central banks, sovereign wealth funds and international financial institutions to participate in interbank foreign exchange trading in the country.