Forex Today: Stocks Tumble to Correction on Fed and Russia/Ukraine Fears

After yesterday’s plunge and recovery, global stocks are falling again on fears of monetary tightening and conflict between Russia and NATO.

  • Stock markets fell hard yesterday before rebounding late, with the S&P 500 Index recovering all its losses but still ending the day below its 200-day moving average. At one stage, the index was down by more than 10% from its record high, into correction territory. During the Asian session, stocks have again fallen everywhere. The selloff is seemingly due to fears increase that the Federal Reserve will quicken its pace in tightening monetary policy over the coming months, with many analysts now expecting 4 rate hikes this year instead of the widely anticipated 3, and over fears of imminent conflict between Russia and Ukraine that could involve NATO. The bull market may be over.
  • Cryptocurrencies fell strongly yesterday but the two major cryptos, Bitcoin and Ethereum, made recoveries like stocks markets did. However, both cryptos remain below key nearby resistance levels and look prone to further falls over the coming days. For Bitcoin, the level is $36,656 and for Ethereum, the level is $2,544.

  • In the Forex market, the Japanese yen is the strongest major currency, while the New Zealand dollar is the weakest.
  • Australian CPI (inflation) came in higher than expected at an annualized rate of 3.5% compared to the consensus forecast of 3.2%. This had little effect on the value of the AUD.
  • The Monetary Authority of Singapore tightened its monetary policy slightly after recent inflation data showed higher than expected inflation at an annualized rate of 4%.
  • German Flash Manufacturing & Services PMI data came in stronger than had been expected yesterday.
  • Daily new coronavirus cases soared to a new global record at the end of last week, with more than 3.7 million new cases recorded for the first time.
  • Data suggests that the globally rampant omicron coronavirus variant, while considerably more infectious, has notably milder effects than previous coronavirus strains, with an estimated 70% reduction in the probability of hospitalization. This is potentially very good news for both health and economy. Pfizer have announced they plan to have an omicron-specific vaccine ready in March.
  • It is estimated that 60.5% of the world’s population has received at least one dose of a coronavirus vaccination.
  • Total confirmed new coronavirus cases worldwide stand at over 355.6 million with an average case fatality rate of 1.58%.
  • The rate of new coronavirus infections appears to now be increasing most quickly in Algeria, Armenia, Austria, Bahrain, Bangladesh, Belarus, Belgium, Belize, Bhutan, Bosnia, Brazil, Bulgaria, Chile, Costa Rica, Croatia, Cuba, Czech Republic, Denmark, Estonia, France, Georgia, Germany, Guatemala, Haiti, Hungary, Iraq, Israel, Japan, Jordan, Kazakhstan, South Korea, Kosovo, Kuwait, Kyrgyzstan, Latvia, Lithuania, Luxembourg, Mexico, Moldova, Mongolia, Morocco, Nepal, Netherlands, Norway, Oman, Pakistan, Panama, Paraguay, Peru, Poland, Portugal, Romania, Russia, Serbia, Singapore, Slovakia, Slovenia, Sweden, Switzerland, Tunisia, the UAE, Ukraine, Uruguay, Venezuela, and Uzbekistan.
Adam Lemon

Adam Lemon began his role at DailyForex in 2013 when he was brought in as an in-house Chief Analyst. Adam trades Forex, stocks and other instruments in his own account. Adam believes that it is very possible for retail traders/investors to secure a positive return over time provided they limit their risks, follow trends, and persevere through short-term losing streaks – provided only reputable brokerages are used. He has previously worked within financial markets over a 12-year period, including 6 years with Merrill Lynch.