Equities are extending losses on the session now with US futures continuing to dribble lower. S&P 500 futures are now down 0.4% with Nasdaq futures down 0.7% and Dow futures down 0.3% on the day.

On the surface, with bond yields tracking lower today, it looks like a risk-off wave is hitting markets. But I want to say that the bid in bonds appear to be more of a coincidence – at least in part – considering we saw 10-year yields in the US testing the key 4.30% mark yesterday.

Sure, China worries are a legitimate concern and I acknowledged the risks to that here. But whatever the case might be, this is not a good look for equities whatsoever. If higher bond yields were weighing on sentiment before, lower bond yields as a result of global economic worries are also not supportive. Then, what else is there to work with for stocks at the moment?

In FX, the dollar is starting to inch ahead as well as it pushes to the highs for the day – even though the changes are still relatively minor. EUR/USD is down 0.1% to 1.0860 while GBP/USD is down 0.3% to 1.2705. The aussie is also at the lows for the day now, down 0.3% to 0.6385 against the greenback.

This article was written by Justin Low at www.forexlive.com.