Daily summary: Stocks and oil dive as recession fears mount

7:03 PM December 6, 2022
  • Tuesday's session brought a sell-off on the global stock market. The main stock indices from the Old Continent finished the session in red. The DAX fell 0.72%, the FTSE100 lost 0.61% and the CAC40 closed 0.14% lower.
  • German industrial orders data for October surprised on the upside as analysts' expected a 0.2% MoM increase but actual data showed a 0.8% MoM jump.

  • Major Wall Street indices are also performing poorly. Nasdaq fell nearly 2%, while the S&P500 and Dow Jones dropped 1.63% and 1.16% respectively.

  • Deterioration of market sentiment may be caused by uncertainty surrounding Fed's future moves. Recent upbeat data pointed to still a resilient economy and bolstered the case for further monetary tightening. On the other hand, the market still expects the Fed to deliver a more moderate 50 bp rate hike next week.

  • The yield on the US 10-year Treasury note, seen as a proxy for global borrowing costs, consolidated around 3.55%. Meanwhile, the gap between 2 and 10-year bond yields widened to over 80 bp, the largest since at least 1981, when the economy was pushed into a deep recession.

  • Meta stock fell over 6.0% as Facebook owner may face potential EU restrictions regarding its ad business.

  • Morgan Stanley cuts 2% of staff according to CNBC

  • Crude oil experienced a strong sell-off, with the price of Brent falling to its lowest levels this year, which can be attributed to a stronger dollar and rising demand concerns from major economies. OIL.WTI is currently testing key support at $73.60, while Brent hovers near the $79.00 mark. 

  • The US dollar managed to erase early losses and was broadly steady against a basket of major currencies on Tuesday, hovering around the 105.40 mark as investors continued to assess growth and monetary policy outlook. The USDCAD pair jumped to its highest level since the beginning of November. 

  • The greenback also held recent gains against the Chinese yuan while selling against risk-sensitive currencies such as the Australian and New Zealand dollars. Currently NZD and CHF are the best performing currencies while GBP and CAD lag the most.

  • Precious metals rose early in the session, however buyers failed to uphold momentum. Both gold and silver are trading flat around $1770 and $22.15 respectively amid a stronger dollar.

  • Major cryptocurrencies stabilized after yesterday's pullback. Bitcoin trades slightly below the $17,000 mark, while Ethereum oscillates around the $1,250 level.

Yesterday the EURUSD pair bounced off the resistance at 1.0600 and the downward move deepened during today's session. If the negative sentiment prevails, pair may move towards support at 1.0240, which is marked with the lower limit of the local 1:1 structure. Source: xStation5

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