US equities correct yesterday’s gains; EU bourses roar higher

Tuesday started with slight selling in US indices, but since EU markets were closed yesterday, they needed to catch up to Monday’s huge Wall Street rally. 

From other news, Germany, the largest country in the European Union, announced a fresh lockdown, which is always excellent news for German equities. The German DAX is now up six weeks in a row, and at the same time, trading higher for seven consecutive days.

Meanwhile, France reported a rise in patients in intensive care units for Covid-19 to the highest levels in five months as the country has also entered another lockdown. The French CAC index rose to the highest level since 2007.

Elsewhere, the USD fell notably on Monday, with the EURUSD pair rising above 1.18 and the USDJPY pair dropping toward 110. However, US yields are far from rolling down, which could support the greenback further. 

Additionally, markets now imply more than one rate hike by the end of 2022. Almost 140bps of tightening – almost 6 rate hikes – is now priced in from the end of 2022 to the end of 2024.

Precious metals are trying to form another swing bottom (gold near 1,680 USD), but it is hard to tell if they can start an uptrend in the rate-hike-expectations environment. 

Source: https://www.axiory.com/market-news/us-equities-correct-yesterday-s-gains-eu-bourses-roar-higher