- European indices finished today's session lower, with Dax down 0.52% as private sector activity unexpectedly grew much faster than anticipated in the Euro Area, France and Germany, led by a rebound in the services sector while manufacturing activity shrank more, according to preliminary S&P Global PMIs, which reinforces bets that thar rates will remain higher for longer. At the same time, the ZEW Economic Sentiment for Germany improved for a fifth consecutive month.
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Lagarde repeated that the ECB intends to hike 50 bps in March
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Dow Jones is trading 1.65% lower, and the S&P 500 and Nasdaq 100 plunged 1.60% and 2.0%, respectively, as weak financial outlook from Walmart and Home Depot added to concerns that inflation and higher interest rates have started hurting the purchasing power of US consumers.
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Additionally, fresh data supported the case for further central bank policy tightening, driving Treasury yields higher while putting pressure on tech and other growth stocks.
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US PMI indices surprised very positively, showing that the economy is not heading towards recession. Manufacturing PMI rose to 47.8 points, while the services PMI returned to expansion territory at 50.5 points.
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Rising geopolitical tensions also negatively affected market sentiment. President Putin suspended a nuclear arms control treaty and delivered a fresh set of threats to the West.
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Inflation in Canada slows down more than expected to 5.9% YoY, which indicates that the BoC may have made a good decision to suspend hikes. CAD weakened after the release.
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Energy commodities trade lower - Brent drops 0.8%, WTI trades 0.9% lower and US natural gas prices fell over 8.0% and is moving towards key support at $2.0.
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The dollar index traded around 104 on Tuesday, holding near its highest levels in six weeks, while EURUSD pair fell to fresh session lows at 1.0640.
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Precious metals trade mixed. Gold fell 0.60% and is approaching major support at $1830, while silver failed to break above psychological resistance at $22.00.
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Bitcoin once again failed to stay above the $25,000 handle and pulled back to $24,500, while Ethereum oscillated around local support at $1670.
The British pound is the best performing G10 currency today. GBPUSD pair jumped above the 1.2100 level following better-than-expected UK PMI prints and prompted aggressive short-covering. Nevertheless, the price pulled back in the evening, as buyers failed to break above resistance at 1.2150, which is marked with the upper limit of the 1:1 structure. As long as the pair sits below this level, downward move may resume. Source: xStation5
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