USD spiked (USDIndex 105.10), Stocks plummeted once again (NASDAQ -4.68%, Dow -800pts & S&P close to -151pts). Friday’s hot CPI report; low consumer sentiment; stagflation worries continued; and global uncertainty over how hard the FOMC will have to slam on the brakes to slow demand and bring down inflation. Yields higher on fears of aggressive interest rate hikes would push the world’s largest economy into recession (US 5yr & 10yr back over 3.57% & 3.48%, 2yr at 3.33%). Asian markets have sold off in catch up trade, (Nikkei -1.30%). Oil up, Gold remains pressured by rising yields.
- USDIndex rallied to 105.10.
- Equities – Hang Seng and CSI 300 are up 0.3% and 0.4% respectively. GER40 and UK100 futures are posting gains of 1.0% and 0.8%, while a 1.6% rise in the USA100 is leading US futures higher.
- Oil & Gold had weaker sessions – USOil struggles to break $122.00 handle, Gold is slumped on the Fed outlook and the strength in the USD, to $1809.
- Bitcoin TANKED to $20,796. – Major cryptocurrency lending company Celsius Network’s freezing of withdrawals delivered the latest jolt to investors in the asset-class.
- FX markets – EURUSD down at 1.0458, USDJPY tested 135 zone, Cable trades up at 1.2200, from 1.2120.
Overnight – ILO unemployment rate jumped to 3.8%. German HICP inflation was confirmed at 8.7% y/y, in line with the preliminary number. The national CPI rate stood at 7.9% and inflation is at the highest level since 1973, during the first oil price crisis. Chaoyang kicked off a three-day mass testing campaign among its roughly 3.5 million residents.
Today – German ZEW, US PPI and ECB’s Schnabel speech.
Biggest FX Mover @ (06:30 GMT) BTCUSD (-7.02%). Drifts to 20781. Next key resistance is at 2017 peak, 19470. Intraday, MAs flattened, MACD histogram negative, RSI 23 but rising, indicating some temporary bounce but overall downtrend.
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Andria Pichidi
Market Analyst
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