U.S. Opening Bell: Flight To Safety Boosts Yen, Swissy, Gold; Copper Climbs

Equities in Europe along with futures on the S&P 500, Dow and NASDAQ 100 wavered this morning, after Asian traders remained broadly risk-off, pricing in expectations of weaker growth due to the ongoing emerging markets rout. The flight to safety in the early global open boosted US Treasurys and safe haven currencies.

The region-wide STOXX Europe 600 slipped 0.27 percent lower at the open, dragged down by miners shares. However, it later pared losses, trading in green territory by late morning, to then lose steam again and slide into the red. The benchmark has rebounded from a 3 percent selloff over the last six sessions.

The FTSE was down 0.1 percent, with a rebound in sterling pushing the London index in the red. An announcement from the UK's energy regulator Ofgem on Thursday regarding plans to introduce a cap on energy bills to take effect in time for winter lifted UK energy stocks. British Gas owner Centrica (LON:CNA) increased by 5 percent as the cap will bring a level of clarity to the energy market.

Earlier, during the Asian session, the MSCI Asia Pacific Index edged lower for the sixth consecutive day, losing 1.52 percent. China’s Shanghai Composite dropped 0.47 percent, for an aggregated 3.21 percent over the last eight sessions, since mainland shares started being sold off two days earlier.

The Hang Seng underperformed its mainland counterpart, falling 0.99 percent. China’s traders have cashed out

Technically, the recent selloff pushes prices below their uptrend line since early April.

Japan’s TOPIX slid 0.74 percent lower, for a combined six straight-day 2.71 percent drop. Th index has still managed to outperform the Hang Seng despite typhoon Jebi and harsh weather conditions over the past two months.

During yesterday's US session, losses in FAANG shares dragged down the broader market after executives from leading tech companies were grilled by regulators on Capitol Hill over the role of social media in Russia's meddling with the US presidential election in 2016.

The NASDAQ Composite tumbled 1.19 percent, the most in three weeks, led by price slumps in Twitter (NYSE:TWTR), Facebook (NASDAQ:FB) and Alphabet (NASDAQ:GOOGL). The heightened regulatory pressure on tech shares added to fears of an emerging markets spillover, prompting investors to cut losses.

The S&P 500 retreated 0.28 percent, dragged down by Communication Services (-1.3 percent) and Technology stocks (-1.25 percent). Utilities (+1.4 percent) and Consumer Staples (1.15 percent) outperformed as investors turned defensive.

The Dow Jones Industrial Average was the only major US index that closed in positive territory, while small caps listed on the Russell 2000 underperformed, dropping 0.33 percent. Once again this demonstrates that it isn’t the trade war that has been driving markets in the latest rout, but rather the overall fear of EM-spurred global selloffs. In times of uncertainty, the stability of mega-cap companies, such as those listed on the Dow, attracts investors while small caps are considered risky.

In FX markets, the Dollar Index extended yesterday’s decline, in favor of the more traditional safe haven assets: the Japanese yen, the Swiss franc and gold.

The UK's pound sterling inched higher for a second day after considerable volatility sparked by protracted Brexit discussions. Technically, the current rally may be following the return-move of the GBP's crossing above its downtrend line since April.

Bitcoin, Ethereum and other alt-currencies plummeted after Goldman Sachs reportedly dropped its plans to open a cryptocurrency trading desk.

Bitcoin is down 4.55 percent today and almost 12.75 percent over the last two days, wiping out two weeks of gains. Technically, the slump happened after the price neared the 200 DMA (red), when it proceeded to fall back below the 50 DMA and 100 DMA.