Stagflation Fears Continue to Dominate the Markets

EQUITIES FALL FURTHER ON RUSSIA OIL BAN HEADLINES, NASDAQ ENTERS BEAR MARKET

The US dollar kept drifting north against the other major currencies on Monday and during the Asian session Tuesday. It gained the most versus AUD and NZD, while it lost the least ground against EUR.

NASDAQ 100 — TECHNICAL OUTLOOK

The Nasdaq 100 cash index traded lower yesterday, and today it looks to be heading towards the low of February 24th, at 13020. Overall, the index remains below the downside resistance line drawn from the high of February 2nd, and thus, we would consider the near-term outlook to still be negative.

AUD/USD — TECHNICAL OUTLOOK

AUD/USD entered a tumbling mode yesterday, after hitting resistance at 0.7440. The rate is now testing the 0.7280 zone, and looks like it may continue lower, but it still stays well above the upside line drawn from the low of January 28th. Thus, we will treat the retreat, or any extensions of it, as a corrective phase in the broader upside trend.

AS FOR TODAY’S EVENTS

During the European session, Germany releases its industrial production data for January, while from the Eurozone as a whole, we get the final estimate of Q4 GDP, as well as the employment change for that quarter. Germany’s IP is expected to have rebounded 0.5% mom after sliding 0.3% in December, while Eurozone’s GDP is expected to confirm its second estimate of +0.3% qoq. No forecast is currently available for the employment change.

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