FXTM information and reviews
OctaFX information and reviews
XM information and reviews
FXCC information and reviews
Libertex information and reviews
HFM information and reviews

Stock Futures Plunge, Traders Are Worried About Inflation

13 May 2022 Written by Naeem Aslam  AvaTrade Chief Market Analyst Naeem Aslam

US and European futures are trading lower as traders are primarily concerned about inflation and a hawkish monetary policy. For instance, yesterday, we had a real strong reading for the US CPI m/m, and this has sparked the conversation that the Fed in the US is more than likely to become even more aggressive with its monetary policy. Previously, the Fed Chairman, Jerome Powell, said that the Fed will not increase the interest rate by 75 basis points. Still, given the fact that inflation is showing no signs of slowing down, the Fed will do everything in its power to reduce that.


The blood bath in cryptos continues, and the BTC price has dipped below the 30K price level, and traders are eyeing the next support level, which is at 25K and followed by that is 22K. We are seeing such a tremendous sell-off in the BTC price and other cryptos, which closely follow the BTC price, is the failure of Terra’s USDT peg. Investors are worried that the company has dumped most of its Bitcoin, which at one point was helping the Bitcoin price. In addition, stable coins like USDT are supposed to bring more stability to the space, but they are likely to damage much.

It is clear that bulls have lost the battle, and the selling pressure is very much on. The big question for traders is if the current sell-off will shock Hodlers.


Euro: We argued earlier this week that a weak economy should cause the European Central Bank to reconsider raising rates. With ECB President Christine Lagarde signalling an increase in July, inflation fears have overtaken economic concerns, and the Governing Council’s hawks are winning the fight.

Today’s key question is how fast the hiking cycle will run and when it will terminate, regardless of whether lift-off happens in July or September. Rates are expected to rise again in September and December, with another hike each quarter. The benchmark rate is expected to peak around 1.5 per cent, which we consider to be neutral.


Drillers in the United States will raise oil production slower than predicted due to rising expenses, stymieing the Biden administration’s hopes that the sector would increase output to cut fuel prices. As the US faces record-high gasoline pricing and the most considerable supply interruption in decades, the Biden administration attempts to coax the sector to increase output. Last week, it revealed a plan to replenish the nation’s Strategic Reserves, which are now being depleted to bring down triple-digit oil prices. The proposal to repurchase barrels for the emergency reserve sends a message to producers that there will be a market for their future supplies even if commercial demand slows down.

Soaring oil costs also hamper any potentially aggressive expansion plans, pushing corporations to adjust yearly expenditure plans merely to reach output objectives.

Asian Markets 

The Asian stock market traded sharply lower on the second last trading of the week. The Nikkei index plunged 1.56%. The HSI index decreased by 1.05%, while the KOPSI index fell by 0.92%. The Shanghai index increased by 0.17%.

The Dow Jones’ market breadth lost further momentum. 37% of the Dow Jones stocks traded above their 200-day moving average. The S&P 500 stock breadth also confirmed a decline in momentum. 38% of the shares traded above their 200-day moving average. 

The Dow Jones futures are trading lower today. In terms of economic data, investors will be looking at the UK’s Prelim GDP q/q. The forecast is 1% lower than the previous reading of 1.3%. In addition to this, we also have the PPI m/m and Core PPI m/m data due at 12:30 GMT. The forecast for the US PPI m/m is 0.5% and for the Core PPI m/m is 0.6%. The Dow Jones futures are trading lower, and it seems like the price is very much in free fall. The DJ 30 has pierced the lower line of the Bollinger band on the daily time frame, which suggests higher volatility and higher chances of a rebound as well. The price is trading well below the 20-day SMA in the same time frame, suggesting that bulls are not driving. The 50-day SMA continues to trade below the 100-day SMA in the same time frame, so we could see more pain heading its way. 

As for the RSI, it indicates that the prices are oversold on the daily time frame. Currently, the RSI is trading at 31. The near term support is at 30,966, while the resistance is at 33,708.   

Stock Market Rally


Share: Tweet this or Share on Facebook


Santa Rally: Your Christmas Gift From The Stock Market
Santa Rally: Your Christmas Gift From The Stock Market

Christmas is a religious holiday that has evolved into a cultural and commercial celebration with tales of Santa Claus delivering presents on a reindeer-pulled sleigh through the night sky...

7 Dec 2022

Citigroup heading for UAE
Citigroup heading for UAE

One of the largest and most famous banks in the world is Citigroup, headquartered in New York City… at least, for now. There have been some employee movements...

6 Dec 2022

XAU/USD upside appears more compelling ahead of US NFP
XAU/USD upside appears more compelling ahead of US NFP

Gold price consolidates recent gains around four-month high after crossing the key resistances. Cautious mood, US Dollar rebound allows XAU/USD bulls to take a breather...

2 Dec 2022

Oil’s correction in rumors about further production cuts by OPEC
Oil’s correction in rumors about further production cuts by OPEC

The price of Crude oil resumed the downward movement after failing to cross above the daily trendline which was valid since late June.The price only rebounded to the upside...

1 Dec 2022

The Downfall of Euro in 2022: the Analysis of its Reasons, the Current Situation, and the Objective Forecast
The Downfall of Euro in 2022: the Analysis of its Reasons, the Current Situation, and the Objective Forecast

Before getting down to analyzing why Euro reminds of a mafia victim in cement shoes falling off a Chicago bridge, allow us to open it up with a meme joke that best describes this whole ordeal...

30 Nov 2022

Is Boeing stock about to take off?
Is Boeing stock about to take off?

Boeing stock (BA) has been in free fall since March 2021, from $269 (USD) dropping to $121 at the end of September 2022. And then came a reversal, raising prices to over $175...

29 Nov 2022

Editors' Picks

FXCM information and reviews
ActivTrades information and reviews
RoboForex information and reviews
MultiBank Group information and reviews
MultiBank Group
FxPro information and reviews
Vantage information and reviews

© 2006-2022 Forex-Ratings.com

The usage of this website constitutes acceptance of the following legal information.
Any contracts of financial instruments offered to conclude bear high risks and may result in the full loss of the deposited funds. Prior to making transactions one should get acquainted with the risks to which they relate. All the information featured on the website (reviews, brokers' news, comments, analysis, quotes, forecasts or other information materials provided by Forex Ratings, as well as information provided by the partners), including graphical information about the forex companies, brokers and dealing desks, is intended solely for informational purposes, is not a means of advertising them, and doesn't imply direct instructions for investing. Forex Ratings shall not be liable for any loss, including unlimited loss of funds, which may arise directly or indirectly from the usage of this information. The editorial staff of the website does not bear any responsibility whatsoever for the content of the comments or reviews made by the site users about the forex companies. The entire responsibility for the contents rests with the commentators. Reprint of the materials is available only with the permission of the editorial staff.
We use cookies to improve your experience and to make your stay with us more comfortable. By using Forex-Ratings.com website you agree to the cookies policy.