Asian stock markets rebounded on Friday to pare the previous day's losses, but weak economic growth in Europe and worries the U.S. Federal Reserve might scale back its quantitative easing program capped major gains.
Traders will be watching the track of the euro Friday, as they decide how defensive they should be going into the weekend. Thursday was a second day of "risk-off" selling with stock, commodities and the euro all heading lower.
"I don't expect a crash. But I think for the time being, the market has peaked out" and "bonds, which are extremely oversold, could rebound," Faber said on CNBC.
The euro dropped to a six-week low against the dollar and a three-week trough against the yen Thursday in the wake of data showing a struggling euro zone economy.
Gold rose 1 percent on Thursday as weaker U.S. economic data boosted hopes that the Federal Reserve will maintain its monetary stimulus, allaying fears that the U.S. central bank may stop buying assets soon.
Both U.S. light, sweet crude and Brent crude oil prices settled, pressured by weak euro zone economic data and the possibility that the U.S. Federal Reserve might curb its economic stimulus measures.
U.S. Treasurys rose on Thursday as worries over a lack of economic recovery in Europe and higher-than-expected U.S. claims for jobless benefits prompted investors to buy assets perceived as safe havens.
Downbeat economic reports, hints of a possible early end to dollar-denting Fed policies, and unease about the Italian election are creating a perfect storm for the euro.
A sharp fall on the Milan stock market hit European shares on Thursday, with uncertainty over this weekend's Italian elections.
U.S. stock index futures continued to trade in negative territory Thursday, a day after the S&P 500 logged its worst one-day selloff in 2013, following a disappointing jobless claims report and as consumer price index remained unchanged in January.
China markets resumed their decline, after a one-day recovery on Wednesday, dampened by fresh worries about monetary tightening and expansion of property sector curbs.
The recent run-up in sovereign bond yields combined with a recovery in global growth could lead to a crash in bond prices similar to the one seen in 1994, said AMP Capital in a report.
The U.S. Federal Reserve's signal that it may not continue its bond buying program is a game changer for global equity markets, Dennis Gartman, editor of "The Gartman Letter" told CNBC on Thursday.
A massive sell-off in Asian stock markets on Thursday erased the previous day's strong gains after Wall Street fell on minutes from the Federal Reserve's latest meeting as worries mount the United States could stop or cut its monetary stimulus program.
Markets threw up enough technical red flags amid a wave of volatility Wednesday to have traders wondering if the first real sell off of 2013 has finally arrived.
The yen may have tumbled 17 percent against the dollar since the start of November, making many currency speculators, including George Soros, rich. But that depreciation could vanish with one analyst telling CNBC that investors shouldn't get too carried away.
The dollar jumped to a four-week high after minutes from the Federal Reserve's last meeting suggested policymakers may have to slow or stop buying assets before seeing the pick-up in hiring.
U.S. Treasury debt prices rose on Wednesday, even after records of the Federal Reserve's January meeting showed policymakers discussed the slowing or stopping of Fed bond purchases that are aimed at reducing unemployment.
Commodities tumbled on Wednesday as investors worried about global supply and demand issues amid an uneven economic recovery.
Gold fell below $1,600 an ounce to a seven-month low, as rumors of a troubled hedge fund forced to liquidate positions triggered a sell-off of commodities.
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