TOPICS MENTIONED IN THIS MARKET BRIEFING:
- LEuropean Stock Exchangesfall ahead of US inflation
- Wall Street weighed down by the continued rise in yields
- Chart of the day –BTC/USD : downside risk dominates
European stock markets fall ahead of US inflation
European Stock Exchanges retreated at the start of the session on Tuesday, the fear of runaway inflation likely to lead to rapid monetary tightening by central banks penalizing the equity markets.
The bond market is experiencing a new episode of rising government bond yields: the yield on ten-year Treasuries takes nearly four basis points to 2.8186%, moving to its highest since December 2018, and its German equivalent, the benchmark in the euro zone, climbed to 0.857%, the highest since July 2015.
The theme of inflation is essential with the approach of the publication of the monthly figures for consumer prices in the United States at 2:30 p.m., a further acceleration of which could comfort the Federal Reserve in the scenario of a more pronounced monetary tightening than foreseen.
The Reuters consensus expects consumer prices in the United States to rise 8.4% year on year in March, which would represent the largest increase in the index since January 1982.
Wall Street weighed down by continued rise in yields
Wall Street ended lower on Monday amid jitters over rising government bond yields on fears the major central banks might accelerate monetary policy tightening.
Rising prices and central bank policies remain at the heart of investors’ concerns at the start of the week. The U.S. consumer price index due on Tuesday is expected to come in at 8.4% year on year in March, further increasing pressure on the Federal Reserve to try to control rising inflation .
Economists polled by Reuters believe the Fed is likely to announce two consecutive half-point rate hikes in May and then June, which could jeopardize growth in the world’s largest economy.
Othersfinancial market news
Oil prices rose, erasing some of the previous day’s losses, as the market weighed the possibility of sanctions against the Russian energy sector and OPEC warned that it would be unable to offset the loss of Russian crude.
Today’s economic calendar:
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CHART OF THE DAY – BTC/USD: Downside risk dominates
The BTC chart pattern is starting to unravel and prices have broken through key support around $41,000. At the same time, everything suggests that the BTC was moving in a rising wedge, so the breakout of the lower boundary opens the way for a deeper correction.
If the buyers fail to recapture $41,000 soon, the sellers could drive home the point in order to rally to the lower boundary of the long-term channel. Given the context, a return to $35,000 cannot be ruled out.
For the time being, Bitcoin remains highly correlated to traditional markets, in particular to the Nasdaq 100 index. Consequently, the pressure on bond yields penalizes growth stocks and, by extension, cryptocurrencies.
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