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Denis Sergienko • 2022-09-19

A sluggish start to the key week

A sluggish start to the key week

Global markets begin the crucial week comprising multiple central bank events on a back foot as hawkish hopes remain tact, led by Fed. Headlines from China and Ukraine also exerted downside pressure on the sentiment and magnified the risk aversion.

The holidays in Japan and Britain seem to have restricted the intraday moves amid a light calendar elsewhere.

Even so, the US dollar remains firmer and weighs on the major currencies including the recent dissenter USDJPY.

Yields remain inactive and stock futures printed mild losses while commodities held lower grounds amid a risk-off mood.

That said, gold and crude remain pressured towards the recently flashed multi-month low whereas the cryptocurrencies witnessed a larger blow during the weekend and extended the south-run.

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Following are the latest moves of the key assets:

  • Brent oil also drops near 1.0% as bears attack $91.00.
  • Gold reverses Friday’s rebound from a two-year low, down 0.80% near $1,660 at the latest.
  • USD Index renews upside momentum while piercing 110.00.
  • DAX and Eurostoxx both print nearly 1.0% intraday losses by the press time.
  • Wall Street also witnessed losses led by Nasdaq’s 0.9% daily downside.
  • BTCUSD loses nearly 5.0% to $18,500 while ETHUSD drops 2.5% to $1,300.

Risk-aversion intensifies

Be it the increasingly hawkish Fed bets or the chatters that China’s economic conditions are bad, not to forget the Russia-led interruption of the Pevdinokrainsk plant’s power supplies, everything contributed to the sour sentiment. The PBOC rate cut, however, tried to tame the bears but could not.

Comments from Russia and US President Joe Bide also magnified geopolitical risk and negatively affected the riskier assets.

The absence of major hardships from hurricane Fiona and the recession woes together recalled the oil bears while gold dropped back towards the two-year low on downbeat headlines from the key customer China, as well as due to the firmer US dollar and hawkish Fed bets.

Elsewhere, disappointment from Merge and uncertainty over the Fed’s crypto watch seems to keep BTCUSD and ETHUSD bears hopeful.

  • Strong buy: AUDUSD
  • Strong sell: ETHUSD
  • Buy: USD Index, USDCAD, Nasdaq, USDJPY
  • Sell: DAX, FTSE 100, gold, BTCUSD

A light day ahead

Apart from the second-tier statistics from Canada and the US, markets are likely to remain inactive but in the bear’s grip. However, a corrective pullback can’t be ruled out during the pre-event consolidation and the same highlights the early Tuesday’s full markets.

May the trading luck be with you!