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Dow Jones, Nasdaq 100, US Dollar, Fed, British Pound, BoE, Yen, BoJ

Market sentiment took a turn for the worst this past week, with a sea of red seen across the world. On Wall Street, futures tracking the Dow Jones, S&P 500 and Nasdaq 100 fell 4.4%, 4.8% and 5.3% respectively. Collectively, this was the worst week since the beginning of this year. This is as the DAX 40, FTSE 100 and ASX 200 weakened 4.8%, 2.9% and 4.2% respectively.

Volatility was back on the rise, with the VIX “fear gauge” up 11.85%. There were a couple of reasons why. The first was a more hawkish European Central Bank, which continued adding to the global monetary policy tightening narrative. Then the week wrapped up with unexpectedly higher inflation in the United States, raising the odds of a 75-basis point Fed rate hike in July.

The latter meant a solid week for the US Dollar, which outperformed every single G10 currency. It did the best against sentiment-linked ones, such as the Australian and New Zealand Dollars. The…

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