Choppy markets continue

It’s been another choppy day in financial markets with Europe ending a mixed bag and US indices all in the red but to varying degrees.

The markets are very indicative of the uncertainty that we continue to see from Ukraine/Russia negotiations to sanctions, interest rates, recession warnings, lockdowns etc. There’s no end to the uncertainty, which makes the resilience we’re seeing in stock markets all the more impressive.

Europe and the US continue to tighten sanctions against Russia, albeit with the EU still held back by its over-reliance on oil and gas. Recent events suggest the Kremlin remains undeterred even if negotiations continue to take place. It’s hard to be particularly optimistic on that front but we live in hope.

And it seems investors do too because against the backdrop of high inflation, rapidly rising interest rate expectations, recession warnings and very high commodity prices, US indices are a mere 5% from all-time highs.

The PMIs look healthy on the face of it as countries rebounded from the omicron slowdown but given the risks that lie ahead, and the impact of higher inflation, it’s clear that the risks for the data in the coming months are firmly tilted to the downside.

Bitcoin breakout still a bullish signal

Bitcoin has failed to build on the breakout momentum over the last couple of weeks which may disappoint some but it probably shouldn’t. We’re seeing consolidation across financial markets right now and bitcoin is clearly not immune. The breakout could still be a strong signal but just not the explosive one we’re used to in this space.

For a look at all of today’s economic events, check out our economic calendar: www.marketpulse.com/economic-events/

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