The risk-off mood continues in global markets following Friday’s US inflation rise, with stocks and other risky assets continuing to fall as the USD Dollar and yields continue to rise.
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- Good opportunities remain in the market for traders to short “risky” assets.
- Stock markets globally fell heavily yesterday, with the S&P 500 reaching a new 15-month low, ending the day down by more than 3.8%. The US stock market is well into bear market territory.
- BTC/USD traded as low as $20,816 a few hours ago after falling by more than 13% yesterday. The price could trade as low as $13k soon. There are likely to be a lot of forced liquidations of long positions happening now, and if the price reaches approximately #19k, much more. It is a similar story in Ethereum, while minor coins are at risk of disappearing altogether.
- The Forex market continues to be dominated by a strong USD but its major movement has not been expressed in the USD/JPY currency pair, which is still buoyant but seems to have stabilized as the Bank of Japan publicly hinted it wanted the decline to slow by tweeting “we are monitoring FX movements with a greater sense of urgency”. Instead, the USD has advanced most against other currencies, notably producing a long-term low in the GBP/USD currency pair. The USD is stronger on rising yields, with both the 2-Year and 10-Year US Treasury Yields powering to new highs yesterday.
- US Treasury Yields are continuing their strong rise, with the 2-year yield reaching a 14-year high at 3.431% earlier today.
- Commodities are generally falling in value, as is typical during strong risk-off market sentiment.
- There will be a release of US PPI data later today. This could give further hints on inflation, which is being watched carefully as there is increased speculation that the Fed could hike rates by 0.75% Wednesday and not the widely anticipated 0.50% hike.
- Daily new coronavirus cases globally fell again last week, continuing a long-term trend.
- It is estimated that 66.3% of the world’s population has received at least one dose of a coronavirus vaccination, while approximately 6.8% of the global population is confirmed to have contracted the virus at some time, although the true number is highly likely to be much larger.
- Total confirmed new coronavirus cases worldwide stand at over 541 million with an average case fatality rate of 1.17%.
- The rate of new coronavirus infections appears to now be significantly increasing only in Belize, Brazil, Chile, Guatemala, and the UAE.
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