Summary: With an uptick in the hawkish rhetoric from global central banks last week (barring the ever-dovish Bank of Japan), we have seen stagflation concerns taking centerstage as we enter a new week. This means commodities, especially industrial metals, could take a further dip but remember that supply tightness needs to be considered. Crypto rout has also extended further with Bitcoin now below key levels, signaling broader panic in financial markets is still building as liquidity taps close out.

What’s happening in markets?
Big picture
The global economy is on a runaway train; with growth likely to slow, and the biggest consumer of commodities, China, not likely to come out of lockdown till next year. This is at a time when the US, UK, Australia are raising rates and the ECB, is next. So far this year, Commodities are the strongest performers in Saxo’s equity theme baskets, but commodities are taking a haircut.

The US benchmark – S&P500 is in a downtrend
The S&P has already fallen 23%, but it looks like there is room to fall again still, with next support at 3,500. The next question is when do we think we will see the bottom, well not yet. We have to get through Q2 earnings season and see what companies guide for the year ahead. We will need to see corporate profit growth and upgrades to earnings, and consumer confidence levels pick up before we start to see markets move higher. And we think we are long way off those collective measures being in unison before we see the market move up.

https://www.fxmag.com/forex/what-does-rising-hawkishness-from-globa...