US Stocks recorded their worst day in two months, Yields soared with 10-year Treasuries hitting three-month peak. Vix index, a measure of stock market volatility and often dubbed Wall Street’s “fear gauge”, rose above 23, its second highest level of the year. Fears over a more hawkish FOMC stance for a longer period of time continued to weigh on the markets. More strong data added further to the hawkish Fed case as well with the S&P Global PMIs climbing more than expected, with the services and composite indexes rising back into expansionary territory. US housing market weakened in January for the 12th straight month as continued high mortgage rates kept buyers on the sidelines. RBNZ delivered 50bp hike as expected.
- USD Index slightly below 104, hovering around 23%. The market has fully priced in further rates hikes with a 25 bp increase on March 22, and another 25 bp on May 3.
- EUR– retests 1.06 area once again as markets keep pricing in ECB lifting rates to all-time high.
- Stocks – Wall Street slumped. US100 (-2.50%), US500 (-2%), US30 (-2.06%). Stocks were also hurt by the disappointing guidance from Walmart (+0.61%) and Home Depot (-7.06%), as well as fears from increased competition from China as it reopens, with some indications of easing restrictions on tech. Tesla (-5.25%), Coinbase (-4.80%).
- Lithium crashed by 30% – Could affect EV manufacturers!
- Commodities – USOil dropped to $75.55.
- Gold – steady at $1838.
- Cryptocurrencies – BTC – Slightly lower to $24,050.
- Coinbase (-4.80%) beat earnings but net income of $605 million while net income was a loss of $557 million. Coinbase shares, which lost about two-thirds of their value over the last year, have rallied sharply since the start of 2023, up roughly 80%. (Boost from BTC rally.)
Today – FOMC Meeting Minutes in the spotlight.
Biggest FX Mover @ (07:30 GMT) US100. Retests 12000. MAs extend lower, MACD histogram & signal line negative, RSI 29.88.
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Andria Pichidi
Market Analyst
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