- European indices extended losses on Friday, with DAX losing 1.66% and contracting 2.7% on a weekly basis, as recession concerns and hawkish comments from several ECB policymakers weighed on market sentiment. At the same time, the energy crisis is far from over and governments in Europe brace for the possibility of energy rationing.
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Wall Street indices also retraced further, as profit warning from global delivery bellwether FedEx put additional pressure on risky assets.
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UoM report showed sentiment for the US increased to a five-month high of 59.5 in September, while the median expected year-ahead inflation rate declined to 4.6%, the lowest reading since last September.
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On the FX market we could observe some dollar strength. The dollar index firmed up near 20-year highs around 109.8 and is set for its fourth weekly gain, as better-than-expected data cemented expectations that the Fed will deliver another supersized interest rate hike at next week's policy meeting. GBPUSD pair fell below 1.14, which is the lowest level since 1985 as latest data from the British economy sparked additional recession fears. UK retail sales plunged 1.6% MoM in August, the biggest decline since December 2021.
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Currently JPY and NZD are the best performing major currencies while CAD and GBP lag the most
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Mixed moods prevail on commodities markets. NATGAS price fell 4.5% amid rising inventories. Crude oil is doing much better, benefiting from the weaker US dollar. We can observe similar sentiments on the precious metals market, where gold gains 0.6% and silver jumped over 1%.
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Several investment banks have issued a gloomy outlook for the oil market. Standard Chartered Plc points out that the global oil market swung into a “large surplus” this quarter, while Morgan Stanley and UBS Group AG lowered near-term forecasts on recession fears, according to Bloomberg.
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The end of the week on the cryptocurrency market was dominated by bears. Bitcoin is currently losing more than 2% and is trading around $ 19,300. Ethereum is also performing poorly, decreasing by nearly 5% towards support at $ 1,400.
US2000 fell over 2.5% on Friday and is currently testing local support at 1790 pts which is marked with previous price reactions. Should break lower occur, downward move may accelerate towards key support at 1650 pts. Source: xStation5
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