- European indices rose for a third consecutive session on Tuesday, with the CAC40 and the DAX 40 index adding 0.7% and 0.2%, respectively, while FTSEE 100 jumped by 0.42% driven by gains among materials and consumer discretionary stocks.
- Wall Street indices rose sharply despite ongoing recession fears. The Dow Jones jumped 2.0%, S&P 500 rose 2.6%, and Nasdaq 100 is trading nearly 3.0% higher as it seems that traders decided to buy the dip after last week's massive sell-off.
- 'Big Tech' stock moved higher today. Tesla shares are up more than 10.0% as Musk expects strong demand to continue, while Meta Platforms continue to underperform.
- US existing home sales fell by 3.4% to a seasonally adjusted annual rate of 5.41 million in May, the lowest since June of 2020 and broadly in line with market estimates. Sales went down for a fourth consecutive month as rising mortgage rates and decades-high inflation negatively affects household income.
- Fed's Barkin indicates that the recent decision on interest rates was correct and strong rate hikes should be continued. At the same time, however, there is no pressure for a higher than 75 bp rate.
- Treasury Secretary Janet Yellen said that the US is in talks with allies to further restrict Russia’s oil revenue by capping the price it would get for its crude.
- Crude oil rebounded in the morning, however the majority of gains have been erased later on. Brent currently trades at 114.80, while WTI is testing 109.60 level;
- Gold continues to trade around $1835 despite the weaker US dollar. Silver failed to break above resistance at $22.00 and pulled back slightly;
- Yen fell to a 24-year low and the USDJPY pair jumped above 136.00 resistance as BoJ is expected to maintain loose policy. According to Citi, the BoJ's policy will not change until 2023, with the end of the term of the current chairman Haruhiko Kuroda.
- Risk-on sentiment supported major cryptocurrencies. Bitcoin price rose above $21,300, while Ethereum jumped above $1160 level.
The beginning of the session was rather muted. We have basically seen a reduction in risk as many market participants seem to be waiting for a new catalyst for a bigger move. Only after the session in the US began, we could observe larger movements. Despite the improvement in sentiment, it should be remembered that the United States is headed for recession, which is underlined by more and more institutions. However, it may be a recession during which we will not necessarily see a strong decline in prices, be it crude oil, real estate or cars. Of course, a lot will depend on the consumers whose expectations are weak, but the impact on the market remains quite large. In the short-term, investors should be prepared for increased volatility on Wednesday and Thursday when Fed Chair Jerome Powell will testify before Congress.
Bitcoin price managed to break above the $21,000 level. If buyers manage to uphold momentum in the future, then resistance at $25,000 may be at risk. However from the long-term perspective sellers have the control, therefore another test of the 17,650 level cannot be ruled out. Source: xStation5
