- European indices finished today’s session in mixed moods, demand seems to be dying out amid higher than expected interest rate increase from ECB and limited gas flow through Nord Stream 1. Buyers become more active at the end of the session, nevertheless DAX fell by 0.27%, while CAC40 and FTSE were slightly positive;
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The decision of the ECB to raise rates by 0.5 bp, although it surprised the markets, did not result in an abrupt strengthening of the European currency. It is worth emphasizing that the overall narrative of the ECB is definitely less hawkish. EURUSD is still trading near parity;
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Italian Prime Minister Mario Draghi resigned from office after three of the coalition’s largest parties refused to back him in his confidence vote;
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The major US stock indices are trading higher however the buyers' path may turn out to be bumpy in the coming hours. The S & P500 is up 0.5%, the NASDAQ rose 0.8%, while Dow Jones fell 0.10%;
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The White House announced that President Joe Biden has Covid 19 with mild symptoms;
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The EIA’s weekly report showed inventories rose only 34 billion cubic feet (bcf) of natural gas into underground storage last week, as the record-high temperatures in the US boosted demand. The price of gas on futures contracts rose again above 8SD per mBtu. Oil prices managed to stay above $100 per barrel;
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Gold erased early losses and rose over 1.0% to $ 1710 level. Silver also made a comeback and is trading around $18.75;
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Tesla shares rise 7% after the company's posted upbeat quarterly report. On the other hand, Netflix stock, which rose sharply yesterday, struggles to break above $220.00 level;
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The stocks of Google, Amazon and Microsoft are moving higher in the final phase of the cash session. Fortinet cybersecurity shares jump almost 3%. Since the beginning of the year, the shares have shown high resilience despite high P/E and P/B ratios;
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Crypto relief rally lost momentum today after Tesla converted 75% of its Bitcoin holdings to fiat currency in order to increase cash position amid lockdowns in China. Bitcoin is again struggling to stay above key support at $ 23,000, while Ethereum managed to defend $ 1,500 level .
Despite early weakness Wall Street bulls showed strength in the second part of the session. Europe indices continue to weaken against the US stock market. Although higher than expected rate increase from ECB sounded hawkish, the overall narrative should support European investors (the TPI plan). Tomorrow's session may turn out to be decisive and determine whether the recent upward move was only a bull's trap or perhaps a harbinger of a greater rebound despite recessionary fears and disturbing data.
Gold was trading under pressure recently, however today buyers managed to defend the major support zone around $1700 amid weaker dollar. As long as price sits above $1670 level, upward correction may be launched. Source: xStation5
