OIL
Brent oil prices fell during early Wednesday trading. Expectations within the financial markets have been shifting to accommodate the resilience of the US economy and stubbornly sticky inflation, resulting in an outlook that now assumes the Federal Reserve will hike rates further than previously thought. This scenario, of a hawkish Fed causing a hard landing for the economy, dents the growth prospects of the US and to some extent those of the rest of the world. The latest FOMC minutes are due for publication later today, when fears of a hawkish tilt could be confirmed, exacerbating the downgrading of growth expectations – a scenario that could see oil prices suffer further as the markets price-in lower future demand.
Ricardo Evangelista – Senior Analyst, ActivTrades
Source: ActivTrader
EUROPEAN SHARES
European markets opened lower on Wednesday, following the trend registered by Asian stocks and US Futures, as traders brace for the publication of the latest FOMC minutes this afternoon.
Tightening monetary conditions remain as the top market driver, pressuring risk appetite, as stock markets registered their worst performance since the beginning of the year. Investors continue to price-in worsening monetary conditions as bets for higher rate hikes and a longer tightening process pile up. The STOXX-50 is lower across all sectors today with the worst performances being registered by real estate as well as basic materials and consumer cyclicals shares, and leaving the benchmark right above the lower bound of its bullish channel at 4,215pts. A break-out here would be significantly threatening for the short-term bullish trend and likely see market consolidation in the shape of range trading or even a deeper bearish correction towards 4,095.0pts and 4,030pts by extension.
Pierre Veyret– Technical analyst, ActivTrades
Source: ActivTrader
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