Market Comment | Bond yields extend decline amid rising recession fears.

Summary

Bonds continued to be demanded as cyclical concerns intensified, driven by trade frictions, disappointing Eurozone data and risks of a hard Brexit. The appreciation of safe-haven currencies and rallying gold prices signaled strengthening risk-off mood across financial markets.

Key points

• Key points:
• Expectations of further Yuan depreciation remain.
• The German industrial production in June declined more than expected fueling market expectations of a more aggressive ECB depo rate cut in September.
• U.S. stock markets continued falling while the implied volatility of S&P500 rose slightly.

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