Market Analysis

European markets open much lower

European markets opened significantly lower on Thursday, alongside Asian shares and US futures, as fear continues to dominate.

The “risk-off” sentiment keeps strengthening this week after the summer optimism faded following the latest hawkish speeches at the Jackson Hole symposium last week.

Jerome Powell’s determination to tackle inflation at all costs while more and more macro data point towards an economic downturn is a massive bearish market driver to investors. Furthermore, the recent lockdown pronounced by Beijing in Chengdu – a city of 21 million people – is also adding pressure to riskier assets as it sparks expectation of slower demand for several assets in the world’s second-largest economy.

Reasons to get long on stocks are fading while bearish leverages continue to pile up, and an increasing number of investors are now starting to consider the possibility of new lows before the year-end.

More clues may be provided today with a batch of PMI releases from Germany, the UK and the US, while tomorrow’s US NFP data are expected to display a slight increase compared to last month.

The STOXX-50 index is now trading close to its immediate support around the 3,470 pts support level. A break-out of this zone could quickly drive prices another 100-points down, towards 3,370 pts.

Source: ActivTrader


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 (“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 future performance. AT provides an execution-only service. Consequently, any person acting on the information provided does so at their own risk.