Equity traders are treading lightly today in the wake of the painful losses racked up this week.
Once again, the mood on Wall Street is setting the tone for Europe as the impressive rebound in US stocks are helping equities on this side of the Atlantic.
Volatility is low in the markets as the US marks Juneteenth. The New York Stock Exchange remains closed, and in turn that has prompted traders in other parts of the world to wait on the side-lines.
Volatility in equity markets has faded following the flurry of central bank meetings this week.
It is a bloodbath for stock markets as recession fears have prompted traders to cut and run. In a bid to try and push inflation down, the Federal Reserve lifted interest rates by 0.75% last night – it was the largest hike since 1994 – the drastic move speaks to the severity of the situation.
Stock markets have rebounded from the brutal losses that were witnessed yesterday as government bond yields have cooled a touch.
European equity markets are in the red as the European Central Bank issued its intention to hike rates by 0.25% next month.
Traders are nervous ahead of tomorrow’s European Central Bank meeting as there is chatter the bank will use the meeting as an opportunity to confirm that rates will be hiked in July.
Fears about highs levels of inflation and the prospect of further interest rate hikes are doing the rounds.
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