Global growth bets are rising; China eases quarantine

📰 Although Wall Street posted a negative performance yesterday, expectations for economic growth are rising as investors continue to hope that equity markets can recover from recent lows. We are positive on equities in European and Asian trading with Wall Street pointing to a positive opening. 

Rare positive COVID news from China is also supporting sentiment in global markets. China has cut in half the time that incoming visitors must spend in isolation – the biggest change yet to a pandemic policy that has isolated the country and fueled economic concerns. This could be the start of waking the sleeping giant and actually improving market and risk sentiment.

The positive change in risk sentiment is also evident in commodity markets, where iron ore, copper and oil are recovering their slight losses from the previous day. Oil prices are also supported by ongoing concerns about a supply deficit, as OPEC countries are unable to increase production or even meet production quotas in the short term. Risk-sensitive commodity-linked currencies strengthened, while the USD remained stable. The EUR benefited from the ECB's increasing recognition of the risk of very high inflation and its willingness to increase the pace of future rate hikes.

Market sentiment remains positive – as it so often is at the beginning of the third quarter/half year – but market participants are probably still too optimistic about corporate earnings and forecasts. In the medium term, I still see pain ahead. However, China's opening would be the spark to keep market sentiment positive for now. China's central bank has also pledged to continue to support monetary policy to help the country's economy. I expect growth and cyclical stocks such as the energy sector to post gains today.

Meanwhile, in the Bavarian Alps, G7 countries are discussing further steps to support Ukraine, sanctions against Russia, which is benefiting greatly from rising energy prices, and how to curb Russian energy imports and possibly the price of (Russian) oil. While many investors expect that this could lead to a significant drop in oil prices, in reality this does not change the supply deficit.


👁 ROB'S MARKET OVERVIEW:

🇺🇸 US Markets ↗️
Cyclical Stocks ↗️
Tech/Growth Stocks ➡️/↗️
Financial Stocks ➡️/↗️
Energy Stocks ↗️

💱 Forex Markets 
AUD, NZD, CAD ↗️
USD, EUR ➡️/↗️
GBP, CHF ➡️/↘️
JPY ↘️

⚒ Commodity Markets ↗️
Oil prices ↗️
Gas prices ↗️
Metal prices ↗️
Precious Metals ➡️

⚡️Crypto Market ➡️

(*↗️ bullish, ↘️ bearish, ➡️ sideways / stable, ↕️ mixed / volatile)

Yours, Robert 🇨🇳🌅🤓📈