Opening Bell: Global Stocks Cave On Trump Impeachment Probe; Bitcoin Tumbles

Opening Bell: Global Stocks Cave On Trump Impeachment Probe; Bitcoin Tumbles  | Sep 25, 2019 12:34

  • U.S. futures join global stock tumble on Trump impeachment probe
  • WTI drops on inventory build, Saudi expectations to restore supply by next week
  • Dollar strengthens; yen climbs across the board on dovishness of BoJ's Kuroda
  • Bitcoin plunges after key margin call, looks set to resume downtrend

Key Events

A report that China is preparing to purchase more U.S. pork did little to spare Futures on the S&P 500, Dow and NASDAQ 100 from joining a global slide this morning, following news that the U.S. Congress has opened a formal impeachment inquiry into the U.S. president.

S&P 500 Futures 1-Minute Chart

Though the probe—which sees Donald Trump accused of seeking foreign interference to corner a political rival—may stumble upon a vote in the Republican-majority Senate, it was enough to spur risk-off trades and offset any trade tailwind.

Europe’s STOXX 600 was dragged down by energy and technology shares—the former tracking falling oil prices.

STOXX 600 Daily Chart

From a technical standpoint, the pan-European benchmark cleared the uptrend line since Aug. 15, with even its opening price standing below it. Both the MACD and RSI triggered sell signals.

Earlier, Asian equities flashed red across the board, falling the most in three weeks on the Trump impeachment announcement. Political instability in the world’s largest economy is never a good thing for markets, but the risk increases exponentially when it is paired with a prolonged and volatile trade spat with the world’s second largest economy, threatening a global recession.

South Korea’s KOSPI led the decline, tumbling 1.33%. Hong Kong’s Hang Seng followed with a 1.28% loss and China’s Shanghai Composite gave up 1.00%.

Global Financial Affairs

UST 10-Year Daily Chart

Meanwhile, the yield on 10-year Treasurys rebounded slightly after edging lower for the eighth straight day on renewed risk off, failing to return to positive levels. Technically, yields slipped below the 50 DMA, after falling out of the monthly uptrend as they synchronized with the long-term downtrend line since November 2018.

The Dollar Index gained even against a stronger yen. For its part, Japan’s currency strengthened versus the euro and pound, as five-year domestic bond yields fell to a record low, following comments from the country’s central bank Governor Haruhiko Kuroda that added to speculation of an interest rate cut in October.

The pound reversed almost all of Tuesday’s gains, which were favored by the British Supreme Court's ruling that Prime Minister Boris Johnson breached the law by suspending Parliament.

West Texas Intermediate oil futures extended losses after API industry data indicated U.S. crude stockpiles grew last week. Larger inventories added to reports Saudi Arabia expects to fully restore its oil facilities by next week. Technically, WTI slipped below the 100 DMA toward the 50 DMA, guarding the uptrend line since Aug. 7.

Gold fluctuated after a four-day upside run.

Bitcoin plunged by $1,000 yesterday, within half an hour of margin calls at Bitmex. Today, the digital currency extended a decline to a third straight day, but stabilized right on the 200 DMA, which proved a support on Tuesday.

BTC Daily Chart

Technically, yesterday’s tumble completed a—mostly—descending triangle, whose downside breakout suggests that sellers are willing to lower offer prices to find willing buyers.

Up Ahead

  • Chicago Fed President Charles Evans will discuss the economic outlook and monetary policy in Illinois on Wednesday.
  • Thailand decides on monetary policy on Wednesday, followed by the Philippines on Thursday.
  • Core PCE data due on Friday, the Fed’s preferred inflation measure, is forecast to come in at 1.8%.

Market Moves


  • South Korea’s KOSPI tumbled 1.33%.


  • The Dollar Index rose 0.2%.
  • The British pound fell 0.3% to $1.2451.
  • The euro declined 0.2% to $1.0996.
  • The Japanese yen edged 0.2% lower to 107.30 per dollar.
  • The Australian dollar fell 0.3% to 0.678 per dollar.
  • Bonds

  • The yield on 10-year Treasurys dropped less than one basis point to 1.64%.
  • The yield on 2-year Treasurys slipped one basis point to 1.61%.
  • Britain’s 10-year yield declined two basis points to 0.512%.
  • Japan’s 10-year yield fell two basis points to -0.256%.
  • Commodities

  • West Texas Intermediate crude fell 0.9% to $56.75 a barrel.
  • The Bloomberg Commodity Index slid 0.3% to 79.09.
  • LME nickel declined 0.6% to $17,085 per metric ton.
  • Gold dropped 0.1% to $1,529.93 an ounce.

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