Risk sentiment fades as Nasdaq breaks lower

Important news this week

• Wed, 19th, 08:00 CET UK Consumer Price Index.
• Wed, 19th, 20:00 CEt US FOMC Meeting Minutes.

Risk sentiment fades as Nasdaq breaks lower

Markets are losing momentum across the board. Stocks are weaker and the positive risk sentiment is fading, but interestingly the US Dollar is also losing some of its recent strength. This creates a more unusual setup where both equities and the Greenback are under pressure. The Nasdaq is leading the downside after failing to break above the important 30,000 level, with the rejection now opening the door to further downside.
The Australian Dollar is adding to the warning signals. AUDUSD has produced a bearish turnaround at resistance, suggesting that risk appetite could deteriorate further. This is particularly important because AUD often acts as a useful barometer for global risk sentiment. Oil remains broadly stable with little net movement, meaning energy markets are currently providing few additional signals.

Market talk

The key question is whether this is simply a correction after the recent rally or the beginning of a broader risk-off move. Nasdaq weakness below the 30,000 area and the bearish AUDUSD reversal are two signals worth watching closely. Crypto is surprisingly resilient so far, holding relatively steady despite weaker equities. If the Nasdaq continues lower, however, crypto could come under renewed pressure as well. The fact that the Dollar is not strengthening alongside falling stocks makes the current move particularly interesting.

Tendencies in the markets

• Equities correcting, USD weak, BTC sideways, ETH sideways, oil positive, metals lower, JPY weak.