Markets Struggle to Stabilize After Shockwave Selloff

Hello traders, and welcome to Tuesday’s market commentary, where the global financial landscape continues to digest and adjust after the sharp selloff from Friday. The shockwaves from that decline are still being felt across all major asset classes, and despite yesterday’s brief rebound, markets are once again under pressure. The overall sentiment remains fragile and risk-averse, with investors shifting away from riskier assets and into safe havens amid rising concerns over the economic outlook and the potential escalation of trade tensions.

Starting with indices, after Monday’s recovery attempt, futures are again flashing red as we approach the European session. The rebound proved to be short-lived, and sellers have quickly regained control. Traders are increasingly worried about slowing global growth and the possibility of renewed trade wars, both of which are adding weight to the bearish sentiment. The overall picture on the equity markets remains negative, and it seems that investors are far from convinced that the worst of the correction is over.

Turning to the currency market, we can see a clear flight to safety. The Japanese yen, Swiss franc, and U.S. dollar are the strongest currencies today, benefiting from safe-haven inflows. On the other hand, antipodean currencies — particularly the Australian dollar — are under heavy pressure following dovish signals from the RBA meeting minutes, which failed to inspire any optimism. The British pound is also notably weak this morning, dragged down by disappointing UK claimant count change data and growing uncertainty about the UK’s economic trajectory.

In the commodities market, the situation remains mixed but tilts toward the bearish side. Oil continues to suffer, extending the decline that began on Friday and now reaching new long-term lows. The sentiment on oil is clearly negative, with traders seeing little sign of a reversal for now. Meanwhile, metals are showing a divided picture — palladium and aluminum are posting modest gains, but silver and copper are falling sharply. In fact, silver saw a notable intraday drop early in the European session, as traders took profits amid increasingly overbought conditions that have been building up over the past few weeks.

From the macro perspective, Tuesday’s calendar brings a few key updates. We’ve already seen disappointing labor data from the UK, which added pressure on the pound, and Australian monetary policy meeting minutes that dealt another blow to the already weak antipodean currencies. Still ahead, we’ll have speeches from Federal Reserve Chair Jerome Powell and Bank of England Governor Andrew Bailey, both of which could inject fresh volatility into the market later today.

Overall, Tuesday’s theme remains caution and consolidation, as global markets continue to adjust to Friday’s dramatic downturn. Traders should stay alert — while the initial panic may be easing, the underlying market tension is far from over.

Source: https://www.axiory.com/analytics/market-news/markets-struggle-to-stabilize-after-shockwave-sell