CURRENCY: Australian Dollar was declined against greenback and other major currencies on Thursday, as a rout on Wall Street and weak European and USA economic data dented global risk sentiment, sending investors scurrying to safe-haven assets including government bonds.
"There has definitely been a change in sentiment for investors starting with the volatility we had last week".
The growing global pressure on Saudi Arabia over the death of journalist Jamal Khashoggi also weighed on investor sentiment.
On Wednesday, data showed sales of new USA single-family homes fell to a near two-year low in September, the latest sign that rising mortgage rates and higher prices were hurting demand for housing.
Adding to the air of tension police intercepted suspected bombs mailed to former US President Barack Obama, Hillary Clinton and other high-profile Democrats, as well as to CNN, in what NY officials branded an act of terrorism.
The Russell 2000, which has been seen as a closer proxy for the strength of the USA economy as a larger percentage of its sales come domestically than the S&P 500, is now down nearly 16% from its highs and within spitting distance of a new 52-week low, as noted by Bespoke Investment Group. They followed disappointing forecasts on Tuesday from industrial giants Caterpillar and 3M.
The tech-heavy Nasdaq composite bore the brunt of the sell-off, leaving it more than 10 per cent below its August peak, what Wall Street calls a "correction".
In dollar terms, the Nasdaq vaporized $524 billion in market capitalization overnight.
The S&P 500 index fell 84 points, or 3.1 per cent, to 2,656.
It's been a painful start for what has historically been the kindest quarter for the city's stocks. The small-cap Russell 2000 was also sharply lower, falling 57 points, or 3.8%.
In foreign exchange markets, client participation on both spot and options was fairly light, Citi noted in a separate note.
In currency markets, funds flowed to the U.S. dollar and Treasuries and out of the euro and the British pound.
The euro shed 0.7 percent to $1.1397 EUR= and breached a major chart bulwark at $1.1430. Industrial stocks slid 1.90 percent.
The yen got the usual safe-haven bid, with the euro skidding to a two-month low at 127.68 yen EURJPY=. Even the dollar eased to 112.08 yen.
"This is more about global GDP because 3M is cutting its FY forecast so that is a worry for U.S. investors anxious about slowing growth: 'Is the world slowing down and will our companies feel the pain?,'" said Kim Forrest, senior portfolio manager at Fort Pitt Capital Group in Pittsburgh.
The December crude contract was down US$1.95 at US$67.41 per barrel and the November natural gas contract was up 8.2 cents at US$3.22 per mmBTU.
Spot gold XAU= was a tad firmer at $1,236.52 an ounce.