Global risk assets continue to tumble; UK sell-off in overdrive 

The negative risk sentiment continues for now, even after the heavy losses in the previous week. Concerns about prolonged inflation and worries about a global economic slowdown continue to grow.

Markets in the U.K. took center stage as the pound plunged to an all-time low in Asian trading and bond yields climbed to their highest level in more than a decade. The chaos in markets triggered by the UK government's tax plan on Friday intensified after the government pledged further tax cuts. The sharp sell-off in the UK and the sharp decline in GBP stalled and recovered a bit after Sky News reported that the BOE is expected to issue an emergency statement today. However, the chaos in the UK and the apparently conflicting plans of the government and the BOE will continue to provide fuel for the fire.

European stocks have fallen back into the bear market (down more than 20%). Further losses in metals and oil prices also pushed mining and energy stocks sharply lower.

Analysts and investment banks are increasingly shocked, especially since most saw or predicted the start of a strong recovery after the June/July lows and were badly wrong. However, risk markets are now at new 2022 lows and I foresee further losses. The OECD has further lowered growth forecasts for the G20 countries and expects further interest rate hikes – well into 2023. German business confidence has deteriorated further. The new center-right government in Italy was also received rather negatively.

The USD remains in demand, and U.S. government bond yields also continue to rise. A number of important economic data are due this week, including GDP reports and PMI figures from China. Several statements from Fed officials will also keep the markets on their toes. Last week was as bad as we predicted – I see more losses this week. Potential (earnings) warnings from S&P 500 companies could also weigh heavily at any time. 

The JPY remains bearish as analysts do not believe that the Japanese Ministry of Finance's plans will help the JPY stop its decline. The analysts are thus following our analysis after being very wrong, as they so often are. Commodity prices (and thus also the AUD, CAD and other risk/commodity-linked currencies) remain under pressure due to recession worries and the strong USD.


🇺🇸 US Markets ↕️/↘️
Cyclical Stocks ↕️/↘️
Tech/Growth Stocks ↕️/↘️
Financial stocks ↘️
Energy ↘️

💱 Forex Markets
USD, EUR ➡️/↗️
CHF, AUD ➡️/↘️

⚒ Commodity Markets ↘️
Oil prices ➡️/↘️
Natural Gas prices ↘️
Metal prices ↘️
Precious Metals ➡️/↘️

⚡️Crypto Market ➡️/↘️

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

Yours, Robert 💵👑🇺🇸🇪🇺🇬🇧📉