Risk sentiment spirals ahead of U.S. open
LONDON (Apr 6) It has been another poor day for risk sentiment as the Dax and FTSE 100 drop ahead of the U.S. open. The EuroStoxx index is down just over 2% with a wide range of companies underperforming including the likes of Adyen and Prosus. German and Dutch companies make up seven out of the 10 worst performers.
Gold has been volatile during the EU session. The precious metal started the session just under flat and then picked up to trade 0.73% higher. Now the yellow metal is heading back to the low of the day and close to the support zone on the hourly chart below at $1918/oz. If that level breaks to the downside the next big support zone stands at $1888/oz through the psychological support of $1900/0z.
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Later in the session, the market will be looking forward to the latest Fed meeting minutes. Money markets are now pricing in 225bps worth of hikes by the end of the year. This is the most that has been price in three decades and the minutes could give us some clues about how this could be done and indeed if the hawkishness is justified. There is also the question of the speed of the balance sheet rundown. If the FOMC indicates a faster process risk sentiment could suffer further. Interesting U.S. session ahead.
KITCO
