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Midday Update
The markets opened with safe-haven currencies bidding as sentiment shifts to risk-off in the near term. The Chinese zero-Covid infection policy may see Beijing getting into lockdown risking global growth.
The demand for commodities will dwindle as the largest consumer of commodities gets into lockdown. Growth concerns amidst skyrocketing inflation have pushed investors’ sentiment into a risk-off mood.
Russia shifts focus to Ukraine’s eastern territories as attacks in Mariupol continue. US diplomats, Blinken and Austin’s visit to Kyiv to meet with Ukrainian president Zelensky has seen the US pledging further support of +$700 million to Ukraine. The war cloud continues to underpin the near-term outlook towards a risk-off mood.
AUDJPY plunged by -1.44% early Monday, European session as Chinese lockdowns risk economic growth. The pair broke below 0.9300, a 2-week low and a critical area to watch out for is the 0.9100 near-term support. A break below that area may reinforce a bearish outlook and may cause AUDJPY to suffer renewed selling pressure towards 0.8910.
The GBPUSD extended its drop by -0.92% to its lowest since September 2020. The Pound continues to suffer selling pressure as worries of a market recession rise amidst sliding Retail sales and consumer confidence approaching all-time lows.
The resilience of the US dollar continues as investors bid for the safe-haven currency due to global growth uncertainties and a hawkish Fed tone in the near term.
A break below the 1.2683 critical support may see bears targeting the 1.2500 psychological support. However, a hold above the near-term support may see bulls attempting to recover losses in the near term.
EURGBP rose by +0.30% to a monthly high at 0.8440 post-French presidential elections on 24 April. The EURGBP is boosted by optimism from the French presidential election. On Sunday, Emmanuel Macron won a 2nd term presidency against Marie Len pen and investors focus on June parliamentary elections.
A break above the 0.8440 high may see bulls reaching out for the 0.85000 psychological barrier. German IFO Business Climate beat expectations and investors are on ECB Panetta’s speech later in the New York session.
European stocks tanked early Monday morning as a sell-off in global stocks ripples across the market. The CAC40 was down by -1.55% to a 5-week low at 6400.00 and a break below that area may reinforce a bearish outlook towards a 6200 near-term low.
The FTSE plunged by -1.70% to 7340 and a break below that area may see bears targeting 7100.00 near-term support. Dax lost -1.67% after breaking below a 14000 near-term support and the index may trade lower in the near term. Investors focus on European bank earnings on Tuesday.
US stocks face inflation headwinds and bears continue to dominate the trend. The S&P futures were down by -0.54% as bears target the 4100, one-year low. The Nasdaq futures dropped -0.67% towards 12950, yearly lows. The Dow Jones Industrial Index plunged by -0.51% and could retest the one year low at 32250.00 near-term support.
In commodities, USWTI is back below $100/barrel losing -3.88% as global demand for commodities falls. Brent was down by -3.43% from 105.84 and a break below 100.00 may renew bearish interests targeting the 96.00 area.
