European Equities, Inflation, Crypto Talking Points
- ECB forum continues with the Fed, ECB and BoE maintaining a hawkish narrative
- CAC 40, IBEX 35 and EU Stoxx Index end in the red but DAX 40 leads the way
- Bitcoin (BTC/USD) trades side-ways, while Ethereum remains faithful to $1,100
Europe Fundamentals, ECB Forum and Inflation Fears Drive Stocks, Crypto Lower
Major stock indices are struggling to hold ground with recession fears surging at a rapid rate. After a slight rebound in equities and crypto witnessed earlier this week, optimism surrounding the easing of China’s Covid-19 restrictions has been overshadowed by surging recession fears, weighing on risk assets.
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With the ECB (European Central Bank) forum currently underway, Fed Chair Jerome Powell, ECB President Christine Lagarde and BoE (Bank of England) governor Andrew Bailey have held onto the hawkish rhetoric, emphasizing their commitment to restoring price stability despite current events.
For European equities, intensifying tensions between the EU and Russia and the ‘energy shock’ that has been exacerbated by the war remains a major hinderance for stocks and indices alike with contractionary monetary policy driving sentiment.
European Equities Price Action
With the German DAX (DE40), Euro STOXX 50 and Spanish IBEX 35 all trading in the red, the Euro STOXX 600 has fallen back towards key support at 410 while the French CAC 40 revisits the 6,000 psychological zone. If the Stoxx 600 falls below 410, a break of 406 (38.2% Fib of the 2020 – 2022 move) could open the door for 400 (the June low) with further bearish momentum driving prices back towards the Dec 2020 low at 380.
EURO STOXX 600 Weekly Chart
Source: TradingView, Chart by Tammy Da Costa
CAC (France 40) Daily Chart
Source: TradingView, Chart by Tammy Da Costa
In the same way that equity bulls were held back by fundamentals, Bitcoin remained in a tight range with sellers determined to clear the $20,000 mark, paving the way for a potential retest of the June low at $17,567.
Bitcoin (BTC/USD) Daily Chart
Source: TradingView, Chart by Tammy Da Costa
— Written by Tammy Da Costa, Analyst for DailyFX.com
Contact and follow Tammy on Twitter: @Tams707
Read More:Recession Fears Loom Dragging Stocks & Bitcoin (BTC/USD) Lower
