Joshua Mahony MSTA
Scope Markets
- Markets rally, yet bearish shadow remains
- Yellen testimony mixed, yet indices drop
- Fed rate environment becoming increasingly muddy
Today is providing some much needed respite from the rout which has characterised global stock markets in the first seven trading days of February. While investors will no doubt be breathing a sigh of relief as European markets head north, there is a feeling that we are not out of the woods quite yet as bearish sentiment lingers.
Today’s testimony from Fed chair Janet Yellen to Congressional members provided the big ticket event of the week, where markets hoped it would shed further light on interest rate expectations at the FOMC. Yellen’s testimony was predictably mixed, as her acknowledgement that a Chinese-centred slowdown is detrimentally impacting US growth expectations was offset by yet another reference to a plan for steady and gradual rate rises going forward. Interestingly, a sell-off in both US and European indices in the face of seemingly dovish comments from the Fed, highlights the underlying bearish sentiment which has driven global stock markets of late.
It is clear that the Fed is some way from reversing its current pathway and moving towards an environment where negative rates are deemed necessary. However, with global stock markets crashing, global growth of a slowing path and financial conditions tightening as a result, it is becoming evident that we may not see another rate hike for quite some time.
This material is a marketing communication and shall not in any case be construed as an investment advice, investment recommendation or presentation of an investment strategy. The marketing communication is prepared without taking into consideration the individual investors personal circumstances, investment experience or current financial situation. Any information contained therein in regards to past performance or future forecasts does not constitute a reliable indicator of future performance, as circumstances may change over time. Scope Markets shall not accept any responsibility for any losses of investors due to the use and the content of the abovementioned information. Please note that forex trading and trading in other leveraged products involves a significant level of risk and is not suitable for all investors.
Recommended Content
Editors’ Picks
EUR/USD stays below 1.0700 after US data
EUR/USD stays in a consolidation phase below 1.0700 in the early American session on Wednesday. The data from the US showed a strong increase in Durable Goods Orders, supporting the USD and making it difficult for the pair to gain traction.
USD/JPY refreshes 34-year high, attacks 155.00 as intervention risks loom
USD/JPY is renewing a multi-decade high, closing in on 155.00. Traders turn cautious on heightened risks of Japan's FX intervention. Broad US Dollar rebound aids the upside in the major. US Durable Goods data are next on tap.
Gold trades on the back foot, manages to hold above $2,300
Gold struggles to stage a rebound midweek following Monday's sharp decline but manages to hold above $2,300. The benchmark 10-year US Treasury bond yield stays in the green above 4.6% after US data, not allowing the pair to reverse its direction.
Worldcoin looks set for comeback despite Nvidia’s 22% crash Premium
Worldcoin price is in a better position than last week's and shows signs of a potential comeback. This development occurs amid the sharp decline in the valuation of the popular GPU manufacturer Nvidia.
Three fundamentals for the week: US GDP, BoJ and the Fed's favorite inflation gauge stand out Premium
While it is hard to predict when geopolitical news erupts, the level of tension is lower – allowing for key data to have its say. This week's US figures are set to shape the Federal Reserve's decision next week – and the Bank of Japan may struggle to halt the Yen's deterioration.