The last session and the week as a whole are not ending very well for the stock market. Of course, this can be linked to yesterday's inflation reading in the US, which leaves no illusions that price pressures have not been this strong for many years and are no longer just temporary. Inflation at 7.5% is pushing expectations of interest rate rises as high as 150 basis points higher by the end of this year. The Nasdaq is already losing almost 1% today, while the market is mainly looking at the fact that 10-year bond yields have crossed the 2% level for the first time since 2019.
Once again, the market is buzzing about the conflict between Russia and Ukraine. Today there was a phone call between key NATO countries. The US is urging its personnel to leave Ukraine, but at the same time indicating that it does not want its troops in the country so as not to provoke a larger conflict that could involve the whole world. RTS lost 5.0% today. This could also be the result of another interest rate hike to 9.5% from 8.5%.
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Create account Try a demo Download mobile app Download mobile appOnce again we see a strong decline in the UoM consumer confidence index. This time the index falls almost to 60 points. Specifically, the index for February comes out at 61.7 points against an expectation of 67 points and against the previous level of 67.3 points. This is another pandemic low, but at the same time the drop largely reflects dissatisfaction with Biden's policy and uncertainty about inflation.
Another rise in US CPI inflation surprised markets and led to a sell-off in global stock markets. Volatility on the indices could also be elevated next week with the release of the FOMC minutes and the US retail sales report for January. However, retail sales have so far been rather disappointing and the meeting minutes indicate an increasingly hawkish Fed, so these publications are unlikely to be seen as positive for the stock market. Be sure to keep an eye on US500, GOLD and USDTRY in the coming week!
EURUSD is back to declines thanks to high inflation. Gold retreated today but returned to the vicinity of the recent local highs at 1840 in the evening. The same is true for oil, which is trading close to the recent local highs. This may be a result of the IEA report that OPEC may be struggling to restore production.
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