European Shares
Shares drifted lower in Europe on Tuesday, extending losses registered during the Asian trading session, amid continuing market volatility. The sell-off in Chinese shares due to renewed lockdowns to combat a coronavirus outbreak as well as the prospect of economic sanctions from the West raised by the possibility of a military support to Russia, weighed market sentiment down despite positive macro figures published overnight. On the other hand, monetary tightening, especially from the FED, is also coming back as a major market driver in investors’ minds this week. Investors anticipate a quarter basis point rate hike during tomorrow’s meeting while six further increases are widely expected for the rest of 2022. This is in line with expectations of a much less accommodative Federal Reserve which is about to bring two years of extremely dovish policies to an end. Investors are now torn between increasing geopolitical tensions and key monetary decisions with one crucial question in mind : how will global growth be impacted ? With such uncertainties on the short, medium and long-term outlook, it is no surprise to see market operators looking for safety trades, driving riskier assets such as equities back to new lows.
Pierre Veyret– Technical analyst, ActivTrades
Disclaimer: opinions are personal to the authors and do not reflect the opinions of LeapRate. This is not a trading advice.
