- Major European indices fell more than 1%
- US indices under pressure after hawkish FED Bullard comments
- Greenback rally continues
European indices fell sharply during today's session with energy and financials shares once again among the worst performers after more hawkish comments from FED. Also today's macroeconomic figures from Europe weighed on sentiment. Inflation figures from Germany showed that producer prices reached the highest level since 2008, while UK retail sales unexpectedly dropped over the same period. Britain also recorded the highest daily rise in new COVID-19 infections since mid-February, amid the spread of the delta variant and despite the country's rapid pace of vaccination. DAX fell 1.78% which is the sharpest one-day decline since mid-May. CAC 40 dropped 1.46% and FTSE100 finished 1.90% lower.
US indices also suffered heavy losses after St. Louis Fed President James Bullard (which was known for his dovish stance) said the central bank could start tightening rates by as early as late 2022, calling it a natural response to economic growth and inflation moving quicker than expected, as the United States reopens from the COVID-19 pandemic. Dow Jones dropped 1.32%, bringing its week-to-date losses to 3.0%. The S&P 500 fell 1%, pushing its loss this week to more than 1.5%. The tech-heavy Nasdaq Composite dipped 0.9%. Meanwhile the yield on the benchmark 10-year Treasury yield fell to 1.45%, after jumping as much as 10 basis points to 1.59% on Wednesday. At the same time, two-year yields rose to 0.24%, the highest level since April 2020 which may indicate that interest rate hike is widely expected.
WTI crude rose more than 0.7% and is trading around $71.50 a barrel, while Brent is trading nearly 0.5% higher around $73.40 a barrel. Elsewhere gold is trading flat around $ 1,772 / oz, however on a weekly basis precious metal is set for 4.5% decline. Meanwhile silver is trading 0.12 % higher around $ 26.00 / oz after touching the lowest level since early May at $25.7 in the previous session. Still silver price is heading for a 6% weekly drop, the highest since November 2020. Meanwhile the dollar index continued to extend gains and broke above 92.30 - level not seen since April.
NZDUSD pair continued its downward move during today’s session and is currently testing March lows at 0.6944. This level is also marked with the lower limit of the 1:1 structure. Should break lower occur, then the next target for sellers is located at 0.6773. On the other hand, if buyers manage to halt declines here, then another upward impulse towards resistance at 0.7121 may be launched. Source: xStation5
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