Market Analysis

Inflation worries push EU indices lower

European indices slid lower on Monday, as sentiment remains under pressure ahead of a significantly busy agenda on the macro front this week.

Uncertainty and caution prevail on global stock markets this week as inflation worries, monetary tightening, economic slowdown and Chinese virus restrictions continue to have a strong impact on investor risk appetite.

Bullish market drivers are becoming increasingly difficult to find for stock traders, especially in Europe where the energy crisis ramped up again following Gazprom’s decision to halt gas deliveries to the EU through one of its key pipelines, as a retaliation measure against the oil purchase price cap set up by leaders of the G7 nations. This decision added pressure to an already uncertain macro context and will likely continue to drive prices down in the short-term.

Meanwhile, investors are braced for another batch of major macro news this week such as the nomination of the new Prime Minister in the UK, an OPEC+ meeting, the decision on rates from the ECB and RBA, the Fed’s Beige book as well as PPI data from China.

Technically speaking, the DAX-40 index has registered one the worst performances on the old continent. The market is trading around 12,650 pts and now heading towards the annual lows between 12,430 pts and 12,555 pts as a short-term bearish trendline continues to cap prices.

Source: ActivTrader


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