Daily summary: Market pessimism mounts

• European indices finished today's session mostly lower, despite a strong start. Dax fell 0,49%, CAC 40 lost 0.43% while FTSE rose 0.13%;

• BoE lifted interest rates by 0.25bps to 1.0% as expected, however expects contraction at the end of the year with two-digit inflation rates;

• ECB Holzmann said policymakers will discuss raising rates and will probably do it in June;

• US indices took a hit, as investors seem to be unsure whether FED will manage to lift rates without pushing the economy into the recession. Dow Jones trades nearly 3.0% lower, while S&P500 and NASDAQ were dragged by tech stocks and fell 3.40% and 4.75% respectively;

• The US 10-year Treasury yield jumped 3.10%, highest level since November 2018, while the dollar index rose to as high as 103.94 a level not seen since December 2002 after falling nearly 1% in the previous session;

• Oil prices erased most of the early gains fueled by President Biden's statement that the United States intends to buy 60 million barrels of crude oil. Brent steadied around $110 per barrel, while WTI retreated slightly below $108 per barrel;

• Downbeat moods can be spotted on precious metal markets, where gold again pulled back below $1900 level and is currently trading at $1875, while silver again returned to $22.40 area;

• Cryptocurrencies mainly followed stock indexes. Bitcoin price fell below $37,000 area while Ethereum broke below major support at $2800;

Thursday's trading session took a great toll on market optimists. Wall Street indices sank, at one point the US100 index even fell more than 5%. In Europe, the mood was slightly better, although the benchmarks from the Old Continent may yet failed to fully price in today’s sell-off in the US. On the Forex market, we observe further strengthening of the US dollar, while the British pound and the Polish zloty both experienced a wave of sell-offs after recent interest rates hikes were considered rather dovish. 

AUDUSD pair fell sharply on Thursday after buyers failed to break above the 200 SMA (red line). Currently price is approaching major support at 0.7060 which is marked with 38.2% Fibonacci retracement of the upward wave launched in March 2020. Source: xStation5