Ongoing fears of a possible economic recession fueled by various factors are weighing on the financial markets.
June 22, 2022
Fears of a global recession are dominating markets, but Fed optimism and the easing of restrictions in China are boosting hope among investors.
July 2, 2022
Markets
Happening events that shape the financial markets
Risk-on mood provides temporary relief to financial markets despite fears of economic recession
— June 22nd, 2022
This beginning of the week is marked by a feeling of improving risk as investors paused after a strong sell-off. European and Asian stocks rose while the safe-haven dollar fell slightly at the open on Tuesday. Nevertheless, concerns remain about aggressive interest rate hikes by major central banks and the risks of a global recession.
In the foreign exchange market, the euro was boosted higher following a speech on Monday in which President Christine Lagarde reaffirmed the ECB’s rate hike plan. The Australian dollar risk barometer also recorded some gains. Elsewhere, the Japanese yen remained under pressure at 135.1 yen to the dollar. The growing divergence in monetary policies between Japan and the rest of the world has pushed the yen to its lowest level in 24 years against the US dollar.
Bitcoin was at $20,629, having failed to break strongly below the psychologically significant $20,000 level in recent days. It has fallen by about 60% this year. The overall crypto market crashed to around $900 billion from a record high of $3 trillion in November, leaving retail investors around the world bruised and bewildered.
Some of the major economic events to watch this week include retail sales in Canada, the UK CPI (consumer price index) and speeches from Fed officials. Keep in mind that the current risk flow could be short-term because basically nothing has changed on a macro level.
Written By Steve Keutcha – Head of Trading
