Fundamental analysis of the Forex market and the European stock market Friday, February 19
European stock indices have halted the longest downward trend since October. Investors are evaluating the vague financial statements of corporations. Meanwhile, the price of crude oil has fallen.
The Stoxx Europe 600 stock index has reopened from a positive range. The S&P 500 futures index has not changed significantly and the Nasdaq 100 futures index (NASDAQ) has grown. However, there are no clear risk flows in the market. But the US dollar has weakened in the Forex market. Meanwhile, the yield on 10-year US Treasury bonds has returned to 1.3 percent and the main focus of investors is on the financial statements of corporations. From a fundamental analysis point of view, the growth of Treasury yields should be to the detriment of the stock market, but this has not yet happened. There is a misconception in the financial markets. Many market participants assume that interest rates will remain close to zero percent forever. But given the growth in long-term bond yields, this seems to be a misconception. This means that stock market investors may face this fact in the near future and exit the market.
Recent economic data show that the global economic recovery is weak and fragile. The UK retail index has fallen sharply, contrary to market expectations. In the crude oil market, the price of light crude oil (WTI) has fallen below $ 60. The US government has stated that it intends to negotiate with the Iranian government. Oil investors believe that easing tensions between Iran and the United States could increase global crude oil supplies.