Growing fears over rising inflation and the interest rate outlook are pushing a continuation of a bearish trend in stocks and a bullish trend in the US Dollar.
Stock markets are crashing again
- Markets have seen a strong rebound in risk-off sentiment over the past few days after last week’s tentative “Fed dovish pivot rally”. This has seen most global stock indices trade lower over the past several days, with the S&P 500 Index reaching very close to its 2.5-year low not seen since the coronavirus panic of 2020.
- In the Forex market, the strong risk-off sentiment is pushing the US Dollar higher almost everywhere, and weakening the commodity currencies, with the AUD/USD and NZD/USD currency pairs falling to new 2-year lows. The USD/JPY currency pair is trading just a few pips below its highest level seen since 1998.
- WTI Crude Oil has continued to rise to over $93 per barrel after OPEC announced a production cut of 2 million barrels per day last week. However, the price has been falling for some hours.
- There will be a release today of the FOMC Meeting Minutes, which will be keenly observed for clues about the Fed’s recent thinking.
- There will be a release today of UK GDP data, which is expected to show neither growth nor contraction over the past month.
- There will be a release today of US PPI data.
- Daily new coronavirus cases globally rose last week for the first time since July, although the overall number is relatively low.
- It is estimated that 68.2% of the world’s population has received at least one dose of a coronavirus vaccination, while approximately 7.9% 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 627 million with an average case fatality rate of 1.05%.
- The rate of new coronavirus infections appears to now be significantly increasing only in Austria, Finland, Germany, Italy, Liechtenstein, Micronesia, Singapore, and Taiwan.