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Markets are trying to find balance | Investing.com

As expected, the investors’ euphoria turned out to be temporary, and after a new respite, sales on the stock markets resumed. As a result of yesterday’s session, Wall Street indices fell in price, completing the worst half of the year in several decades.

While some investors naively believed that the indexes had finally found a bottom, others had no doubt that the markets were simply lifting oversold last week, and there was no question of any reversal of the bearish trend until inflation began to slow down.

At the end of the day, it was limited to a decrease of 0.2%, fell by 0.3%, and lost 0.7%. After the close of the main session, Nike (NYSE:) published for the fourth fiscal quarter, which turned out to be mixed. After the publication, the company’s shares continued to decline, losing about 7% since the beginning of June, and 30% since the beginning of the year.

Asia spent Tuesday’s session partly in negative territory, but by the end of trading the major indexes went into the green zone. The composite regional index MCSI, which is losing almost 4% in June, fell by 0.7%. The index added 0.60% after the release of mixed statistics in Australia, where business confidence marked the second month of decline, while consumer confidence improved. The Japanese rose by 0.52%, while the Chinese – by 0.58%.

In general, investors remain cautious due to persistent fears about inflation, recession and further aggravation of the geopolitical situation in the world. European futures are traded flat before the opening of the session, while American futures are growing slightly, and this at least indicates that at this stage investors have refrained from deeper sales, but this does not at all portend a full return of demand for risk.

Meanwhile, the dollar, following the results of nervous and ambiguous trading on Monday, fell in price, marking the third session of decline in a row. Today, it continues to struggle for the 104.00 mark, signaling the need for catalysts that could return quotes to recent multi-year highs.

Until the end of the week, the US currency may show even sharper fluctuations in the light of the upcoming report on the US and the speech at the ECB forum, which ends on Wednesday. On a longer-term horizon, the bullish potential of the USD remains, and in the coming days, a hike in quotations in the direction of 103.40 and even lower, where buyers should become more active, cannot be ruled out.

Theoretically, the ECB can undermine the potential of the “American” if it takes up more vigorous policy tightening, which will support. Given the economic difficulties of the eurozone and the situation in the energy sector, aggressive rate hikes should not be expected, but even the anticipation of the ECB exiting negative rates will be enough to contain the bullish potential of the USD in the short term through the strengthening of the euro.

About author

Oxford graduate with honors. He worked in large financial projects for well-known Wall Street corporations. After he earned his first capital and a reputation as a successful trader, he opened his own company. At the moment, the growth of the company's capital is 20% per year.
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