Havens such as the yen and German bunds continue to be in favour with investors, as the morning bounce in European markets fades and US indices struggle to recover from their hefty losses yesterday.
The site of small gains across the board for equity markets marks a decent change of tempo from the unrelenting selling of the past week, but at the moment bullish investors can do little more than impotently shout into the gale of selling that has seen key benchmarks lose ground rapidly.
Zurich’s decision to come calling for RSA was, in a sense, inevitable, given the poor share price performance of the UK firm; the euphoric reaction in RSA’s share price seems to indicate investors will welcome a safe harbour within the comforting embrace of the Swiss insurance giant.
US indices posted small gains at the open that have done little to eat into the big falls of the past few sessions. With the Federal Reserve meeting now underway, all eyes are on what Janet Yellen and co will say tomorrow; US dollar weakness persists however, after manufacturing PMI figures from the US inched higher in July.
The US economy might not be sputtering, but nor is it racing ahead, and as a result the 20% surge in the US dollar index over the past year is starting to look a little overexposed.