Daily summary: Sudden rebound in markets

• European indices finished another session lower, with the DAX 40 falling 0.43% as the International Monetary Fund has uncorked a sobering outlook on the global economy, cutting its growth forecast for next year to 2.7% on mounting macro headwinds. 

• BoE announced it will widen the scope of its daily gilt purchase operations to also include purchases of inflation-linked gilts to avoid a meltdown in the UK pensions sector. 

• London's Heathrow airport has warned of slowing demand for flights over the winter, citing a rebound in Covid-19 and a rising cost of living. 

• The UK unemployment rate fell to a new low since 1974, as those considered inactive increased while real wages continued to fall.

• US indices erased early losses following news that recent inflows into Bank of America suggests that markets expect that stocks are nearing a bottom.

• The Dow rose over 1.2%, lifted by Amgen, whose stock jumped over 6% following the Morgan Stanley upgrade. The S&P 500 and the Nasdaq bounced back from their lowest level in more than two years as lower Treasury yields brought some respite to beaten-down tech stocks. 

• Uber and Lyft shares fell at one point over 10.0% after the Biden administration unveiled a proposal that could force the ride-hailing companies  to hire drivers as full-time workers, rather than as independent contractors.

• FED Mester, which said that the biggest policy risk is that the Fed doesn't hike rates enough. In her opinion the Fed has yet to make any progress lowering inflation  and monetary policy needs to be moved to restrictive levels.

• Oil WTI fell 1.8% while Brent is trading 1.5% lower as a stronger dollar, slowing global economic growth and new covid restriction in major Chinese cities raised demand concerns.   

• Mixed moods prevail on the precious metals market. Gold rose 0.60% and tested $1680 level, while silver extended decline, however sellers failed to break below $19.20 level.

• The dollar index paused a four-day rally and fell below 113, after touching 113.5 early in the session, which was the highest level so far this month, despite Loretta Mester's hawkish comments. EURUSD pair rose 0.50% on Tuesday, however buyers struggle to break above resistance at 0.9800 as traders take a wait-and-see approach ahead of FOMC minutes release tomorrow, the highly-anticipated CPI report Thursday and the kick-off of the earnings season which will provide more clarity on the Fed's hawkish stance. Currently NZD and GBP are the best performing major currencies while JPY and USD lag the most.

• Downbeat moods can also be spotted on the cryptocurrency market. Bitcoin briefly fell below $19000, while Ethereum tested $1265 level. Nevertheless buyers managed to erase some of the losses later in the session.

USDCHF pair pulled back sharply from the parity level amid dollar weakness and fresh comments from SNB Chair Jordan, which said that central banks could face political pressures to slow down or postpone interest rate hikes, however their independence is crucial in order to bring inflation down. If sellers manage to uphold current momentum, local support at 0.9870 may be at risk. Source: xStation5