Global Markets Analysis - June 7
7 June 2022
Global financial markets started the week quite well with optimism stemming from China. The fact that life is returning to normal after the restrictions related to the covid in China and of course the steps taken to support the economy were effective in this. After Asian markets started the day with purchases and Hong Kong index Hang Seng closed the day with 2.7% increase, optimism spread to European stock markets and then to the USA. The fact that the world agenda remained relatively calm supported the optimism experienced yesterday. However, as in recent times, the dose of optimism quickly gave way to sales at the end of the session or the next day. Towards the end of the session last night, with the 10-year bond yields in the USA rising above the 3% level again, the price lengths shortened and the optimistic mood gradually disappeared.
Elon Musk's statements about Twitter and Tesla yesterday did not escape our attention. Musk warned that Twitter could pull out of its $44 billion deal to buy the social media company if it fails to provide data on spam and the fake accounts it seeks. In addition, layoffs at Tesla, which employs about 100,000 people, after Musk announced that he "has a super bad feeling" about the US economy, demoralized. Since Elon Musk announced the news on Twitter in early April, Tesla has lost nearly 30% in value, nearly doubling the drop in the Nasdaq index!
Gold has been trading around the $1,850 per ounce level for weeks and has been trading on the edge of an important technical level, giving no clear signals. The same is true for silver. We have been working on the importance of the $22 level technically for weeks. As the weather turned negative in the evening yesterday, the ounce price of silver was just below 22 dollars in yen. Unfortunately, the direction is not clear, so we are waiting on the side. Bitcoin, which is in line with the risk appetite and even has a serious correlation with the Nasdaq index, fell to the level of $ 29,500 yesterday, disturbed by the global risk-off mode and of course, the dollar's rise above the 3% level of the market interest. Neither gold nor Bitcoin as a safe haven; We see that the dollar alone prevails.
After US stock markets closed the night with a limited rise, we see a downward trend in Asian stock markets and US stock futures this morning. Unfortunately, the market is not clear. The fact that the inflation problem and the attitude of the FED towards it (50 basis points of interest rate hike is expected at least in the next 2 meetings) are not known exactly, causes the markets to be unable to see the way ahead. As such, the rises recorded one day may be replaced by sales the next day. Just like today.
At the beginning of the new day, it should be underlined that the Japanese Yen has seen its lowest level in 20 years. The fact that the CPI inflation figures to be announced in the USA on Friday are felt and the 5, 10 and 30-year bond yields in the USA rise above the 3% level indicate how on the edge the markets are. In this gentle environment, the messages from the European Central Bank meeting to be held on Thursday are also eagerly awaited, while the EURUSD parity follows a horizontal course around the 1.07 level. EUR/USD could potantially attract buyers beyond 1.0840 in EUR. we will continue to increase our position in every meaningful downturn.