- After Thursday’s sharp drop, stocks fail to recover.
- In Europe, red exceeds 1% in several places.
- The “hawkish” tone of Fed officials and the inflation data weigh on the market mood.
Wall Street’s major indices closed significantly lower on Thursday, with the S&P 500 shedding 1.80%. The futures indicate that there will be no recovery at the opening since in the previous one the future of the index yields 0.10%. The expectation of the monetary policy of the Federal Reserve affects the markets. The S&P 500 is on track for its worst week since mid-January.
The Thursday’s US inflation data showed the highest rate since 1982, above expectations. This initially triggered a rally in the dollar and a pullback in equities. The recovery ended in a slump following comments from FOMC member James Bullard that there could be a 100 basis point hike in July.
Treasury yields hit highs in years. The 10-year bond reached 2.05% and on Friday it is moderating the rise and is located at 1.99%. The 30-year tranche is at 2.28%.
In Europe, the FTSE 100 lost 0.67%, the DXY 0.34% and the CAC 40 1.10%, affected by the weather that left Wall Street on Thursday afternoon. Oil strongly resists the negative tone. The barrel of WTI operates above 91.00, rising 1.42%. Gold is trying to recover the $1830 zone and silver has recovered $23.00 for the time being.
Traders’ focus will remain particularly on expectations around the Fed and the bond market. In terms of data, the preliminary estimate for February of the University of Michigan Consumer Confidence index will be published.
Source: Fx Street
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