Risk Sentiment Improves, Stock Markets Up on Soft Landing Scenario

Commodity dollars and other risk assets closed a bullish week as markets grow increasingly convinced that the US economy will avoid recessio

Risk sentiment was slightly on on this week

Good news has been bad news for risk assets such as stock markets and commodity dollars, since meant that the FED would keep raising interest rates and send the US economy into recession. But on Thursday we saw a batch of positive data from the US and risk assets went hgiher, something new in the last few months. This means that good news is finally good for risk sentiment again.

With a gain of 43 points, the S&P 500 index was soaring on Thursday, and despite rising Treasury yields, it put up a strong performance. It’s becoming more difficult to identify the precise topic that this market trades on. As the market worried about inflation and rising rates, there was a period for several months during which the phrase “good news is bad news” prevailed as markets feared a US recession due to higher rates.

Despite increased Oil prices and improving economic indicators, the market is now increasingly convinced that rates are at the top levels apart from one more hike expected by the FED in November, which won’t likely kill the economy. Even though it’s difficult to reconcile, it emphasizes how quickly market narratives can change in such times.

China has seen a noticeable transition during the past several weeks. We received an RRR decrease on Friday, which I believe has calmed some concerns about a chaotic unwind of problematic loans in China’s financial system. Additionally, it demonstrates that China genuinely wants to stop the economic slump.

China’s economy is a mystery even at its finest, but the current situation is extremely challenging. However, the market is relieved to return to not worrying about China after a period of concern.

ABOUT THE AUTHOR See More
Skerdian Meta
Lead Analyst
Skerdian Meta Lead Analyst. Skerdian is a professional Forex trader and a market analyst. He has been actively engaged in market analysis for the past 11 years. Before becoming our head analyst, Skerdian served as a trader and market analyst in Saxo Bank's local branch, Aksioner. Skerdian specialized in experimenting with developing models and hands-on trading. Skerdian has a masters degree in finance and investment.

Related Articles

Comments

0 0 votes
Article Rating
Subscribe
Notify of
0 Comments
Oldest
Newest Most Voted
Inline Feedbacks
View all comments

HFM

Doo Prime

XM

Best Forex Brokers