Market Analysis

A strong bearish wind is blowing over European assets

FOREX

Despite triggering a bout of risk-off sentiment in the market when he warned of tough times ahead for the economy, and all but ruled out an increase in interest rates until at least 2023, Federal Reserve chairman, Jerome Powell, gave dollar bulls a boost by not announcing any increases in monetary stimulus. Many investors had braced for the announcement of an increase in the Fed’s asset purchase program, which would have weighed down on the dollar; as it turned out such predictions failed to materialise, which explains the dollar gains across the board versus other major currencies during early Thursday trading.

Ricardo Evangelista – Senior Analyst, ActivTrades

 

EUROPEAN SHARES 
A strong bearish wind is blowing over European assets on Thursday, following the trend registered by Asian shares during the night. This change in mindset came at the end of the US session on Wednesday after the FOMC, while maintaining its dovish stance, failed to provide investors with further clues regarding its economic stimulus plans. All sectors are trading in red territory this morning with tech and financial shares leading declines as a “risk-off” mood takes over. The FTSE-MIB is seeing the worst performance – even underperforming the Stoxx-50 index – as the Italian banking sector is among the most shorted this morning. European investors will however pay close attention to this morning’s CPI release as it could seriously impact the next move from the ECB. The meeting minutes from the BoE and the batch of US data release (Jobless Claims and Building Permits) are also likely to drive market volatility higher in the afternoon.

Pierre Veyret– Technical analyst, ActivTrades

 

The information provided does not constitute investment research. The material has not been prepared in accordance with the legal requirements designed to promote the independence of investment research and as such is to be considered to be a marketing communication. All information has been prepared by ActivTrades PLC (“AT”). The information does not contain a record of AT’s prices or an offer of or solicitation for a transaction in any financial instrument. No representation or warranty is given as to the accuracy or completeness of this information. Any material provided does not have regard to the specific investment objective and financial situation of any person who may receive it. Past performance is not a reliable indicator of futures performance. AT provides an execution-only service. Consequently, any person acting on the information provided does so at their own risk.