Risk-off dominates financial markets, awaiting a sign from the White House
Risk-off dominates the financial markets at the start of the week and the news from Asia, combined with the trend in US futures, points to another Black Monday for equity markets. Only some news from the White House can make this start to the week less gloomy.
The intermarket dashboards record the massive move that has taken the markets into a marked risk-off situation. The T30 to SPY ratio spikes and the Commodities to T30 ratio falls sharply, signalling expectations of an increasingly pronounced economic slowdown. Gold’s rally also comes to a halt. The S&P500 is now in the 5200 zone, with the risk of falling well below 5000 if there is no sign of support. Bonds remain on the upside thanks to the rally in Treasuries and expectations (all to be tested) of FED rate cuts. The correlation between equities and bonds has fallen to its lowest level in over a year.
On the macro front, the week started with German industrial production and Eurozone retail sales. US inflation, Chinese inflation and the Fed minutes are expected this week.
Quarterly reports also return this week. Friday will see the first 2025 earnings from the banking giants (JP Morgan, Wells Fargo and Morgan Stanley).
Our forecast analysis points to another negative day for the financial markets, with some light only on the bond front, where yields are still expected to fall. There is a lot of volatility and price anomalies in equities, demonstrating the strength of the downward movement we are witnessing. Commodities are also in decline and gold is not exempt from negative signs.
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NOTES AND WARNINGS
Data compiled by kbmeter.com. Analysis date: 7 April 2025 - 7:28 AM GMT+1
This content is provided for informational purposes only and should not be considered financial advice. All scores and assessments are based on the previous trading day’s closing prices. Futures indications refer to the date and time of the analysis.
