Sell ​​everything (except the dollar)!

A trader works on the floor of the New York Stock Exchange (NYSE) in Manhattan, New York, U.S., May 5, 2022. REUTERS/Andrew Kelly/Files

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A preview of the day ahead at Dhara Ranasinghe Markets.

When the blue-chip Dow Jones index slips more than 1,000 points in one day, US Treasury yields jump 20 basis points and the British pound falls more than 2%, you’d be forgiven for thinking that investors embarked on a sell-off mode everything.

But with the safe-haven dollar at 20-year highs, at least one asset benefited from Thursday’s market chaos.

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Of course, the waters look calmer as European trading begins, although Asian stocks have crashed overnight.

After breathing a sigh of relief that the Federal Reserve had not opted for a massive 75 basis point rate hike at this week’s meeting, in a change of heart investors worried that rate hikes Aggressive moves – like the Fed’s 50 basis point move – won’t trigger a sharp economic downturn or recession.

Volatility was heightened by a surge in real or inflation-adjusted bond yields in the United States, which rose to their highest level since the start of 2020 .

The Bank of England’s warning about the risk of recession and rising inflation above single digits only heightened concerns about the growth outlook, prompting the biggest drop in a day since March 2020 (and we all remember why this month stands out, right?)

Given that it’s non-farm payrolls day in the US, Friday’s trading session may not bring a quiet end to the week.

Economists polled by Reuters predict the US economy added 391,000 new jobs in April, up from 431,000 a month earlier.

The unemployment rate is expected to fall to 3.5%, which would be a pre-pandemic low.

The jobs data, along with next week’s US inflation data, should help frame the debate on the Fed’s policy outlook.

Key developments that should further guide markets on Friday:

– Tokyo consumer prices rise at fastest pace in 7 years Read More

– The ECB must quickly raise its key rates, says the director of the German institute Ifo –

– minutes of the Swedish Central Bank

– Federal Reserve Bank of New York President John Williams

– US non-farm payrolls

– Brazil April CPI

– European profits: Adidas, IAG, Amadeus, Intesa San Paulo, Beazley

– US benefits: CIGNA, Goodyear

US non-farm payrolls
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Reporting by Dhara Ranasinghe, editing by Karin Strohecker

Our standards: The Thomson Reuters Trust Principles.

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