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
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.
- Check out our free forex signals
- Follow the top economic events on FX Leaders economic calendar
- Trade better, discover more Forex Trading Strategies
- Open a FREE Trading Account
Related Articles
Comments
Sidebar rates
Related Posts
Save
Join 350 000+ traders receiving Free Trading Signals
Alerts
Rates
Calendar
Signals