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However, the weekend brought some calming down of moods, and at the beginning of Monday trading hours the main indices tried to rebound. However, with the opening of the cash market in the Old Continent, supply pressure reappeared. The German Dax has already definitely dropped below the support zone and is currently heading towards 15,800 points. Among futures contracts on US indices, the technological Nasdaq is still the most losing ground, due to the increase in yields on treasury bonds.
American 10-year-olds are at their highest levels since the start of the pandemic, reaching 1.80%. Taking into account that the market is practically pricing-in an interest rate hike in March by the Fed and two more before the end of the year, it will be difficult to find an even more hawkish return by the US central bankers.
Currently, the most extreme forecasts assume one hike per quarter. The markets ‘attention this week should be transferred to the companies’ earnings season which is about to start. This week, we will be the first to know the results of the largest US banks, which are a barometer of how the entire economy performed.
In the FX market, the dollar starts the week well and the EUR / USD exchange rate is turning towards 1.13. The Eurodollar prices are constantly fluctuating around this level, because when expectations for normalization increase, on both sides of the Atlantic, and in such an environment, there is little room for major movements. The Australian dollar stands out positively in the G10 group.
This is after better than expected data from the real estate market. On the crude oil market, after last week’s gains related to insufficient supply, the quotations are slightly adjusting, and the WTI barrel drops to the area of USD 78. Gold, on the other hand, is slightly bouncing, but remains below the $ 1,800 per ounce mark.
At the beginning of the week, the macroeconomic calendar is not the most interesting and the market will wait for Wednesday’s US inflation data, which will be the most important publication of this week.
Rafał Sadoch, mForex team, mBanku SA brokerage house