Global risk sentiment deteriorated sharply on Thursday 20 August as rising US Treasury yields — despite the 10-year and 30-year pulling back 6bp and 9bp respectively by close — pressured equities broadly, with the VIX jumping 7.52% to 16.01 and the Nikkei VIX surging 6.33% to 32.44 signalling elevated near-term uncertainty. The Fed remains on hold in the 3.50–3.75% range with limited near-term easing priced, the ECB holds at 2.25%, the RBA at 4.35%, and ongoing Strait of Hormuz shipping disruptions continue to underpin energy prices and a broadly defensive tone. Disappointments from Walmart's Q2 sales result amplified the sell-off, dragging the Dow more than 1.3% lower and the S&P 500 nearly 0.9%, with the Russell 2000 — a key risk barometer — falling 1.34%. Gold surged 1.91% to USD 4,575.30/oz and Bitcoin rallied 5.09% to USD 72,791, illustrating a bifurcated flight to alternative stores of value even as traditional equities sold off.
For Asia-Pacific markets opening this Friday, the combination of Wall Street's broad-based losses, a sharply weaker Nikkei (-3.16%) and KOSPI (-5.80%), and a firmer USD/JPY at 158.98 sets a cautious tone for the ASX open. The AUD/USD slipped 0.11% to 0.7117, offering modest support to Australian resource exporters priced in USD, while iron ore edged down slightly to USD 95.17/t and copper dipped 0.11%. The ASX 200 closed Thursday at 9,053.8 (-0.18%), outperforming regional peers, with the ASX VIX actually falling 1.93% to 10.68 — suggesting domestic volatility expectations remain contained even as offshore turbulence builds. Investors will be watching European flash PMI readings due this afternoon AEST for fresh signals on global growth momentum.