Worldwide sell-off intensifies

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European and American indices fell sharply yesterday amid risk aversion due to rising concerns about future rate hikes and tighter monetary policy, as well as fears about the impact of the Covid-19 crisis in China.

Because of lockdown measures around the country, growth in China might slow down. Yesterday, figures on China’s exports showed that export growth weakened to the lows of 2020.

All eyes will be on inflation data this week, as it might provide clues about whether inflation has reached a peak, and how central banks around the world might react to fight inflation without impacting growth prospects too much.

Some key data and facts from Monday’s trading session:

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  • The VIX (fear index) touched the 35-mark and is up almost 39% in 1 month.
  • TSX, Canada's main stock index, hit a 3-month low.
  • US 10-year treasury yield went above 3% for the first time since late 2018.
  • German 10-year yield hit its highest level since 2014.
  • S&P 500 hit its lowest level since April 2021 below the 4,000 level.
  • European shares touched their lowest level in 2 months.
  • Gold is still down after coming off a run of 3 straight weekly losses.
  • WTI Oil lost more than 6% yesterday.
  • Bitcoin is around its lowest level in a year and a half.
  • U.S. dollar hits a 20-year high.
  • China's yuan is still losing ground, close to a nearly 19-month low.
  • CAD hit its lowest level in 5 months against the USD.
  • GBP/USD reached its lowest level in 2-years.
  • Bitcoin and Ethereum lost around 20% in 7 days.

What else should you monitor this week?

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On Tuesday

  • Australia - Westpac Consumer Sentiment
  • China - CPI and PPI
  • Germany - ZEW Economic Sentiment
  • USA - FOMC Member Williams, Bostic, Waller, Kashkari & Mester Speaks
  • Europe - ECB Member De Guindos Speaks
  • EIA Short-term Energy Outlook
  • USA - API Weekly Crude Oil Stock

On Wednesday

  • Europe - ECB President Lagarde Speaks
  • Germany - CPI
  • USA - CPI m/m
  • USA - Crude Oil Inventories
  • OPEC Meetings
  • Japan - Current accounts
  • Australia - Building approvals

On Thursday

  • New Zealand - Inflation Expectations q/q
  • United Kingdom - GDP
  • United Kingdom - Industrial and Manufacturing production
  • United Kingdom - Trade balance
  • USA - PPI m/m
  • USA - Unemployment Claims
  • EU-Japan summit
  • OPEC monthly report

On Friday

  • USA - Prelim UoM Consumer Sentiment
  • USA - FOMC Member Mester Speaks
  • Europe - CPI figures
  • Europe - Industrial production

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