Extreme Warmongering, Risky Assets Drop Widely, Housing Cools, UAE Plans to Increase Production, Gold Slides, Cryptos Crushed

This week is not just about the Fed, but about the wrath of central banks who are mostly considering sweeping rate hikes. It is difficult to buy equities with this lackluster macro backdrop, lingering inflationary pressures, weak global growth and diminished earnings outlook. Pessimism for equities remains elevated as the US economy appears to have a one-way ticket to a recession as the Fed is poised to remain aggressive. The risks of a retest of the summer lows could easily occur if the Fed remains fully engaged in its fight against inflation.

Data

US homebuilder sentiment continues its record downward trajectory. The National Association of Home Builders/Wells Fargo housing market index fell three points to 46, a ninth straight monthly decline. Almost a quarter of builders said they were cutting prices as rates jumped. Despite the rising costs of land, labor and materials, builders are lowering their prices. The housing market is cooling but there is still a long way to go.

Cryptos Beaten as Yields Soar

Cryptos are crushed as yields soar and pessimism grows for a deeper global slowdown. The entire cryptoverse is vulnerable to soaring borrowing costs and this risk remains at the forefront. This week could be the catalyst that sends the market towards prices at the peak of Fed tightening. This might be a time to rip the band-aid for bitcoin, as the selling pressure might get ugly here, but that might be what is needed to form a bottom.​ ​

Ethereum’s post-merger hangover also continues after the SEC’s Gensler suggests that Ethereum could now mean the crypto becomes regulated as a security. Ethereum was close to bottoming, but Gensler’s warning sparked another wave of selling.

This article is for general information purposes only. It is not investment advice or a solution for buying or selling securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for everyone. You could lose all your deposited funds.

With over 20 years of trading experience, Ed Moya is a senior market analyst at OANDA, producing up-to-the-minute cross-market analysis, coverage of geopolitical events, central bank policies and market reaction to corporate news. . His particular expertise covers a wide range of asset classes, including currencies, commodities, fixed income, equities and cryptocurrencies. During his career, Ed has worked with some of the major forex brokerages, research teams and information services on Wall Street including Global Forex Trading, FX Solutions and Trading Advantage. Most recently, he worked with TradeTheNews.com, where he provided market analysis on economic data and corporate news. Based in New York, Ed is a regular guest on several major financial television networks, including CNBC, Bloomberg TV, Yahoo! Finance Live, Fox Business and Sky TV. His opinions are endorsed by the world’s most renowned news agencies including Reuters, Bloomberg and the Associated Press, and he is regularly quoted in leading publications such as MSN, MarketWatch, Forbes, Breitbart, The New York Times and The Wall Street Journal. Ed holds a BA in Economics from Rutgers University.

Ed Moya
Ed Moya

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