Dhara Ranasinghe gives us a look at what lies ahead for the markets.

Blue-chips slide more than 1000 points per day. U.S. Treasury yields rise as much as 20% and the British pound plummets more than 2%. Investors are in sell all mode.

However, with Thursday’s market chaos at its worst, the safe-haven dollars at their highest level in 20 years, at least one asset was able to benefit from it.

While the waters are calmer now that European trading is underway, Asia shares fell overnight, it’s clear that things have changed.

Although investors were relieved that the Federal Reserve did not opt for a huge 75 bps rate rise at its meeting this week, they still feared that an aggressive rate hike – similar to the Fed’s 50 bps move – could cause economic slowdowns or even recessions.

The volatility was compounded by an increase in U.S. real, or inflation-adjusted, bond yields which reached their highest levels since early 2020.

Concerns about growth prospects were only amplified by the Bank of England’s warning of recession and an inflation rise above 10%. This was the largest one-day drop in GDP since March 2020. (And we all know why this month is so special).

It’s not a non-farm payrolls (or US) day so Friday’s trading session might be a noisy end to the week.

Reuters polled economists to predict that the U.S. created a strong 391,000 jobs in April, compared with 431,000 a month ago.

It is predicted that the unemployment rate will drop to 3.5% by 2020, which would mark a new low in pre-pandemic times.

Together with next week’s U.S. Inflation data, the jobs data should frame discussion about Fed policy outlook.

Markets should be more informed by Friday’s key developments

Tokyo Consumer Prices Rise at the Fastest Pace in 7 Years

ECB should raise rates quickly, according to the head of Germany’s Ifo Institute –

– Swedish Central Bank minutes

Federal Reserve Bank of New York President John Williams

U.S. Nonfarm Payrolls

– Brazil April CPI

– European earnings: Adidas (OTC:), IAG (LON:),  Amadeus, Intesa San Paulo, Beazley

CIGNA, Goodyear – U.S. Earnings