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● **Market-Moving-Must-Knows**

Recent Summary of Global Economic Issues – U.S. Stock Market Decline, Bond Yield Surge, Korean Won Weakness, Commodity Price Drop, and U.S.-China Trade War

1. Sharp Fall in U.S. Stock Market and Rise in Volatility Index (VIX)

The U.S. market recorded a large bearish candle with a significant drop throughout the day.
It started relatively well but showed a downward trend throughout the session, increasing anxiety.
At the same time, the VIX (Volatility Index) is soaring, maximizing investors’ fear.
As such, negative signals from the U.S. stock market are likely to affect the global market as a whole.

2. Abnormal Interest Rate Hike in the Bond Market

Instead of bond prices, which are usually considered safe assets when stocks fall, rising,
Yesterday, bond yields rose, and prices fell.
Several factors are at play, including the Fed’s response to inflation, deleveraging in the market, and
Rumors of foreign central banks selling dollar assets are analyzed as the main causes.
In particular, market anxiety is heightened as the 30-year Treasury yield rises sharply.

3. Korean Won Weakness and Yuan Decline

The Korean won weakened sharply, fluctuating to 1485 won.
This is comparable to the past IMF foreign exchange crisis.
Geopolitical risks such as the U.S.-China trade war appear to be at play.
In addition, the yuan has been continuously weakening since the outbreak of the trade war.
Attention should be paid to the possibility of further decline.

4. Commodity Price Decline – Copper, Gold, Oil, etc.

Unstable signals continue in the commodity market.
Copper prices fell 2%, earning the nickname “Dr. Copper.”
Recorded a sharp decline.
Gold prices show a return from the uptrend, and the appeal as a safe asset is falling.
Oil prices also fell below $60, and concerns about an economic downturn are generally growing.

5. Concerns about Economic Recession and U.S.-China Trade War

According to analysis by JP Morgan and others, the probability of economic recession has increased significantly.
Signals implying the possibility of a recession are also confirmed in the Russell Small Cap Index and the corporate bond market.
As conflicts such as the U.S.-China trade war and tariff imposition intensify,
It is expected that the market’s psychological contraction will have a negative impact on the actual economy.
In particular, unlike the previous Trump administration, China’s willingness to respond is quite strong.
It is difficult to predict the outcome and impact of negotiations.

Key Summary

A sharp fall in the U.S. stock market and extreme volatility,
Abnormal rise in bond yields,
Korean won weakness and yuan decline,
Commodity price decline (copper, gold, oil), etc.
Various economic indicators are deteriorating simultaneously.
These signals are giving rise to anxiety throughout the global economy.
There are concerns that it will lead to an actual economic recession depending on the U.S.-China tariff dispute and the Fed’s interest rate hike decision.
It is time to pay more attention to holding cash and managing risks.

< Summary >
Recently, a sharp fall in the U.S. stock market, a surge in bond yields, weakening of the Korean won and yuan,
Various economic woes, such as falling prices of commodities such as copper, gold, and oil, and the U.S.-China trade war, have emerged simultaneously.
According to the latest economic outlook, there are growing concerns about a serious contraction throughout the global market.
There is a high possibility that an economic recession will become a reality depending on risk signals such as the U.S. stock market, commodity prices, and interest rate hikes.
Accordingly, investors should focus on holding cash and managing risks.

[Related Articles…]
U.S. Stock Market Decline Forecast
Analysis of Sharp Fall in Commodity Prices

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