State of the market : pessimism continues to grow
With the opening of trading on Wednesday a high level of pessimism remains in the market. Besides the fact that the risks of resuming the trade confrontation between the USA and China flared up with a new force, the statistics published in the morning became an additional reason for the growth of pessimism.
At the start of the day, the RBNZ meeting results were published, according to it the key interest rate was lowered to the level of 1.50%. This decision was expected, the pressure on the New Zealander was exerted by the tone of the protocol, which dealt with further easing of monetary policy. This in fact was the reason for the collapse of the New Zealand dollar. A similar decision by the Central Bank of New Zealand is associated with a slowdown in key countries in the region.
The reason for the growth of pessimism in the stock markets were data on China’s trade balance, which caused fears of a slowdown in one of the largest economies in the world. Against the background of recent threats by the United States to introduce new sanctions on Chinese goods, this statistic looks very negative, which may further accelerate the slowdown of the global economy.
The US dollar index at the beginning of the day accelerated the decline in declining the US government bond yields, limiting itself to the support level of 97.40, which corresponds to the lower boundary of the rising channel of the current month. A further weakening of the American dollar is likely to be limited by oversold and support of 97.30-20.
Read also: “Does Monday is so hard as everybody say?”
Hanzenko Anton
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