❗ Nasdaq-100 futures drop over 1% ahead of Wall Street session
It looks like markets are finally starting to realize what direction monetary policy around the world is heading in, especially Fed's monetary policy. FOMC minutes released last week showed that the Fed not only wants to start raising rates quickly but also to start a reduction of its balance sheet. Markets stabilized by the end of the previous week but fear is taking grip of the markets at the beginning of a new one.
Goldman Sachs said that it expects 4 Fed rate hikes this year and the start of balance sheet reduction in July. Fed's Barkin said that the first rate hike in March could be a good call as the labour market is holding strong. It suggests that the Fed may no longer focus as much on reaching full employment and instead focus on the price stability mandate. It should also be noted that US 10-year real yields experienced one of the biggest jumps in history last week.
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US100 is trading almost 1.3% lower already. Index made a break below the support zone in the 15,700 pts area and the 50% retracement of the latest upward impulse. A test of the lower limit of the upward channel can be spotted at press time. Source: xStation5
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