- Worsening global growth expectations weigh on markets.
- The euro falls due to the rise in energy prices in the Eurozone.
- The dollar shoots up, reaches a maximum in decades against the euro.
European markets are down sharply and Wall Street futures are in the red. The deterioration in growth expectations continues to dominate the mood of investors.
Red present, gray future?
At the start of the week in the US after Monday’s holiday, S&P 500 futures fall 1.15% and those of the Nasdaq 1.40%. In Europe, the FTSE 100 lost 1.87%, the DAX fell 2.35% and the CAC 40 fell 2.39%.
The climate of risk aversion is driven by the dollar, the yen and the Swiss franc. EUR/USD and DXY are trading at two-decade lows. The euro is particularly under pressure, due to a new rise in energy prices in the Eurozone and the future vision of complications for the current plan of the European Central Bank. Germany posted its first trade deficit in nearly three decades in May, due to the impact of the war in Ukraine.
The possibility that the American president Biden reverse the tariffs on Chinese products did not manage to curb the pessimism. Recession fears and high inflation continue to impact. To deal with the advance in prices, on Tuesday it was the turn of the Reserve Bank of Australia. The bank raised the interest rate again by 50 basis points on the persistence of high inflation risks and signaled that more action is possible in the coming months.
The dollar it is up on almost every front even despite the big drop in Treasury yields. The 10-year bond yields 2.83%very close to the minimum of the month, the same as the 30-year section that is at 3.07%, far from the 3.20% of just hours ago.
The US durable goods orders report will be published on Tuesday, but no impact is expected. The focus is on the markets themselves. On Wednesday the minutes of the last meeting of the Federal Reserve will be released and on Friday the official employment report.
in the premarket, Tesla falls 1.70% after having the first drop in the delivery of vehicles in more than two years. amazon loses 1.50% and Nvidia 2.40%. Today they present results Ubisoft and Marks & Spencer, among other companies.
The cryptocurrencies they do not escape the general bad tone in the markets. Bitcoin is below $19,500, after losing $1,000 from the daily high. Crypto platforms continue to face withdrawal issues.
The metals They continue with a negative outlook. Gold is trading below $1800, still above recent lows, and is somewhat supported by lower Treasury yields.
Technical levels
Source: Fx Street
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