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MTrading Team • 2022-04-11

Yields favor DXY bulls as the key week begins, gold, BTC dwindle

Yields favor DXY bulls as the key week begins, gold, BTC dwindle

After a downbeat week, global markets remain cautious with eyes on the US inflation data, as well as on the Russia-Ukraine crisis. Adding to the market’s anxiety are China’s covid conditions and likely additional challenges to the global economy due to the same.

The risk-aversion wave weighs on Asian and European equities while the US dollar cheers strong yields. The sour sentiment and firmer greenback challenge commodity bulls and the same could be reflected in Antipodeans.

Crude oil prices also weaken amid the global drive to ease the supply crunch but the bulls remain hopeful amid ongoing geopolitical fears.

Cryptocurrencies remain pressured as macro pessimism disappoints buyers. BTCUSD prints mild gains but the ETHUSD remains on the back foot after snapping a three-week uptrend.

  • BRENT OIL sellers attack $100.00 rate, down 2.00% intraday.
  • GOLD snaps three-day rebound with mild losses around $1,945.
  • USD INDEX seesaws around the 23-month high, near 99.80 at the latest.
  • DOW JONES printed mild gains on Friday but NASDAQ and S&P 500 remained in the losses.
  • DAX and FTSE 100 remain indecisive around 14,250 and 7,630 levels respectively.
  • BTC/USD rises 0.30% to $42,280, ETH/USD drops 0.70% to $3,185 rate.
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Wall Street closed mixed but pessimism prevails

Although hopes of upbeat earnings for Q1 2022 and mixed US data helped Dow Jones to close with mild gains on Friday, the S&P 500 and Nasdaq remained in the red amid fears of faster Fed tightening. Overall, the key US equity benchmarks posted the first negative weekly closing in four and the same pressured shares in Asia-Pacific, as well as Europe, during early Monday.

Mixed inflation data from China, escalating geopolitical tensions in Ukraine and French elections also exert downside pressure on the markets. Additionally, the cautious mood ahead of the US Consumer Price Index (CPI) and the unofficial start of the Q1 2022 earnings also ruin the trading sentiment.

Yields remained firmer and propel USDJPY but the risk-aversion can’t help gold to keep its shine as traders prefer the US dollar. That said, the US 10-year Treasury yields refreshed their 39-month high a few hours before.

Elsewhere, the US government’s readiness to use strategic oil reserves to tame the energy problems allows Brent oil prices to pare recent gains. Further, fears of more US regulations and disappointment from Indian payment services to Coinbase seem to challenge crypto traders.

⏫ 🟢 Strong buy: DAX, FTSE 100

⏬ 🔴 Strong sell: Gold, silver, ETH/USD

⬆️ 🟢 Buy: USD Index, Nasdaq

⬇️ 🔴 Sell: Brent oil, DOW JONES, S&P 500, BTC/USD

Anxious traders to seek solace in the safe heavens

Looking forward, multiple releases from the UK and Europe, as well as the Ukraine-Russia talks and the Fedspeak, may offer intermediate clues to the market players ahead of Tuesday’s US CPI for March. However, the risk-off mood may keep grinding the equities and commodities to the south while the US dollar may remain firmer on strong Treasury yields.

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