The pronounced downturn in equities, highlighted by the Nasdaq's steepest slide since April 2025, sent yields on two-year and 10-year Treasuries sharply lower. This bond market rally curbed dollar strength while lifting the yen to a one-week high and bolstering the Swiss franc. Currency markets also absorbed a modest rise in sterling following a Bank of England interest rate hike. All eyes are now trained on the upcoming non-farm payrolls data to clarify the economic backdrop.
Key points
Political developments in Congress and emerging regulatory worries regarding artificial i…: Political developments in Congress and emerging regulatory worries regarding artificial intelligence infrastructure prompted widespread market de-risking.
Traders lowered the implied probability of a December Federal Reserve rate hike to roughl…: Traders lowered the implied probability of a December Federal Reserve rate hike to roughly 70%.
Crucial non-farm payrolls data will serve as the primary catalyst for the next major shif…: Crucial non-farm payrolls data will serve as the primary catalyst for the next major shift in interest rate expectations.
Sources checked by our analysis pipeline: 1
The trigger for the retreat from risk was a Democratic sweep in Congress that hammered US stocks on Thursday, with the Nasdaq recording its deepest one-day drop since "Liberation Day" in April 2025.
Fears of tighter scrutiny of the artificial intelligence industry, particularly around data centre construction, has roiled global markets this week.
The equity rout prompted investors to find shelter in bonds and haven currencies. The yen strengthened 0.2% to a one-week high of 157.40 a US dollar before reversing some of that gain.
The Swiss franc firmed 0.2% against the US currency. The dollar index, which measures the greenback against six peers, was roughly flat at 101.55.
"The AI selloff is creating competing forces for the dollar," OCBC analysts said. "Falling US yields are blunting the dollar's safe-haven appeal, leaving the yen as the standout hedge against more US-centric volatility, while flows from Japan's Government Pension Investment Fund could provide another tailwind for the yen."
The flight to safety drove the 10-year Treasury yield down overnight. It was last trading at 4.84% in the Asian morning, near its…
The British digital lender is pursuing fresh capital to sustain its ongoing operations and growth initiatives. This strategic financial maneuver comes directly on the heels of failed buyout discussions with Nu Holdings. Furthermore, previous headwinds surrounding secondary stake sales have prompted the firm to seek a direct valuation benchmark instead.
Equity markets in Tokyo experienced severe pressure following overnight turbulence on Wall Street, where major indexes suffered their sharpest declines since April 2025. The selloff, which began earlier in the week alongside emerging election results, intensified as growing anxiety over the artificial intelligence sector weighed heavily on technology shares. Further downward momentum is anticipated across the market as leading semiconductor and tech firms open for trade.
An overnight tech sell-off on Wall Street triggered a massive morning rout across Seoul, halting all equities and derivatives trading early in the session. Investors rapidly offloaded regional hardware leaders over growing fears that recent U.S. election results could stall artificial intelligence infrastructure and data center projects. The sudden drop quickly spread beyond core semiconductor manufacturers, battering major industrial and automotive heavyweights.