This week has important events that we should keep our eyes on for the future trading ideas. The previous week was most about central banks meeting with their rate hikes and comments regardings the future of the monetary policy.
The most important event in the market in the last week happened on wednesday 15.06 when the central bank of the USA decided to raise interest rate by 0.75 basis points from 1.0% interest rate which surprised the markets as it was higher than what the financial analysts expected. The hike from 1.0% to 1.75% was the biggest hike that FED made in the 21st century.
The most important to take away from the FED Meeting is that they assure the investors/traders that inflation is far too high and that inflation surprised the banks again – to the upside the next meeting could well be a decision between 50bps and 75bps.
- DXY – Dollar Index closed bullish on the weekly timeframe with a 2.22% rise due rate hikes, financial analysts says that till fed hikes the rate DXY (USD index) will continue to print new highs.
- GBP – Another important central bank meeting was in UK from BOE (Bank of England) which made a rate hike as expected from the forecast 1.0% to 1.25%, the main ideas from the BOE was that they plan to make a 50 bps rate hike in august and they will act forcefully on inflation if necessary.
- EURGBP – 0.81%
- GBPUSD – -3.58% weekly change
Stock Market – Bloodbath in the american stock market and world markets had a negative reaction due to FED and BOE rate hikes and negative commentaries regarding the inflation problem. SP500, the main american index had one of the worst decline on a weekly perspective; 6.12%, a drop that signals a real panic in the market and a confirmation that the bear market is still there. Nasdaq followed with -6.16% and Dow Jones with -5.12%.
ATH drop since the start of the year in the us stock market
- SP500 -24.59%
- US100 -34.09%
- US30 -19.74%
Crypto Market – crypto market has lost 1.1$ Trilion in market capitalization in the last 77 days, the largest and fastest known loss in it’s history, Bitcoin had one of the worst week in it’s history with a -33.95% drop in a single week and right now it’s located near an important area of psychological barrier – 20.000$. Ethereum followed the btc with a 38.84% drop in a single week and right now it’s trying to go below 1000$ – an important price area for the crypto investors and traders.
The last week crypto total market cap lost around $118 Billions due a lot of margin calls and mass liquidations in the market.
In conclusion the market is following the narrative of the last week with the money flowing into safe-heaven assets such as USD, Gold, US Treasuries as investors fear of a potential recession during this year and they want to protect their money rather than invest in risk on assets such as stock market or crypto.
Have a great trading week ahead!