Technical Analysis

Stocks continue to stay under pressure so far today

Here’s a snapshot of the proceedings so far:

  • Eurostoxx -0.8%
  • Germany DAX -1.0%
  • France CAC 40 -0.9%
  • UK FTSE -0.6%
  • S&P 500 futures -0.9%
  • Nasdaq futures -1.1%
  • Dow futures -0.6%

The key driver weighing on the market mood to start the week is the lockdown protests across China over the weekend. It’s pretty much the relative uncertainty that is spooking markets for the time being. As mentioned earlier:

“China protests over the weekend is the main story and that is going to be a challenge for Beijing to handle. Such a situation is rare for the country but amid its prolonged zero-Covid policy and reinstatement of lockdown measures, the public frustration is understandable. The “easy way out” would be to change course and heed the people’s wishes but the main obstacle is that Xi has staked a lot of his own authority on the whole zero-Covid policy approach. Backing down from that now would come at a political cost and will be a blow to Xi’s pride and ego.”

Elsewhere, 10-year Treasury yields are down 3.6 bps to 3.666% while the dollar is sitting more mixed on the day, holding higher against the commodity currencies but lower against the euro, franc and yen at the moment. The latter is the lead gainer with USD/JPY down over 1% to 137.65 with price testing its lowest levels since August.

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