FOREX
The US dollar is trading flat in relation to other major currencies this Tuesday morning, halting the losses that saw it dropping to a five-week low during the previous session. The greenback’s weakness results from a repricing of expectations on the Fed’s rate hiking cycle, with the terminal rate now expected to be lower than previously assumed. The recent turbulence in the global banking system, which can be linked to the steepest rate hikes of the last four decades, has given central banks food for thought. Against this background, the Fed will announce tomorrow if it will increase rates again, or if it will pause, as it decides between fighting inflation and risking exposing more cracks in the global financial system, or pausing and allowing already sticky inflation to gain even more traction. Tomorrow’s decision will be a momentous one for the global financial system and economy, and likely to determine the short-to-medium term direction for the US dollar.
Ricardo Evangelista – Senior Analyst, ActivTrades
Source: ActivTrader
EUROPEAN SHARES
Stock indices continued to trade in the green on Tuesday, as investor appetite for risk increases following the coordinated response from central banks to the recent turbulence in the financial sector. A strong sense of relief boosted demand for riskier assets this week, after investors saw the Federal Reserve, the ECB, the BoC, the BoJ, the SNB and the BoE announce a coordinated action to provide market stability through liquidity supply to the financial sector. With central bankers backing the markets the trading environment for traders completely changed, as this new market driver significantly eased uncertainty, recession worries and provided traders with a much clearer outlook. All benchmarks and all sectors are up, with the STOXX-50 index being mostly driven by financials and energy shares while the CAC-40 index saw the best performance of the Eurozone so far. The market is challenging its mid-term bearish trendline around 7,100 pts following an important bullish gap after the opening bell. The next target will be found 70-points higher at 7,170 pts while a top towards 7,275 pts and 7,400 pts could be interesting zones to look for if the bullish enthusiasm continues further.
Pierre Veyret– Technical analyst, ActivTrades
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.