European shares slid moderately following unpredictable trading environment
Shares slid moderately in Europe on Monday, following a mixed trading session in Asia after disappointing data from China dented market sentiment overnight. European benchmarks pared some of the gains registered at the end of last week as lingering bearish leverages keep the trading environment unpredictable for investors. With sentiment weighed down by monetary tightening, poor growth outlook and geopolitical risks (especially after Finland and Sweden’s effort to join NATO), it remains very hard for investors to identify where the bottom will be for stocks. This week is likely to remain volatile for riskier assets. Investors will seek direction from the G7 finance minister meeting on Wednesday, as well as speeches from several FED speakers – in addition to CPI data from the EU and the UK, while China will decide on rates on Friday. The DAX-40 index still trades above its first immediate support at 13,900.0pts despite today’s slight retracement. A bounce-back over that level could quickly drive prices towards their last top around 14,080.0pts.
Pierre Veyret– Technical analyst, ActivTrades
As Monday kickstarts another week of trading, the US dollar Index remains close to the almost 20-year maximum reached last week. The global landscape offers plenty of reasons to worry: War in Ukraine and the covid-related lockdowns in China, cast long shadows over the growth prospects of the global economy, exacerbating the ongoing inflation problem, intensifying the energy crisis and aggravating supply chain backlogs. This scenario is naturally supportive for the greenback, due to its haven appeal during times of greater uncertainty, in a dynamic compounded by the Fed’s hawkish determination to control inflation, which contrasts with other central banks’ greater reluctance in tightening monetary policies.
Ricardo Evangelista – Senior Analyst, ActivTrades
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