Tuesday, December 12, 2023

Europe risks a 4% decline if it loses support at 4,170 points

The week has been really bad for European stocks, which have already seen a decline of almost 2% since Monday. Today, futures suggest that selling will continue and therefore the Old Continent’s main index could trade at lows not seen since March. Behind these declines continues to be the hawkish tone adopted by major central banks after recent meetings.

It was difficult to predict that European stock markets would go in search of the support zone this week, but it was a possibility “as long as the EuroStoxx 50 does not overcome the resistance at 4,340 points, which has returned to the lateral base.” last four months,” explains Joan Cabrero, Ecotrader consultant.

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“Well, the apparent inability of the EuroStoxx 50 to overcome this resistance means that we are once again experiencing a decline that needs to be watched because if the above support is lost, I fear that we could end up seeing the decline “That’s down from March lows around 4,000 integers,” the expert adds. “I still think that for new medium-term purchases in the European stock market we will have to wait for this extremely supportive environment to be reached,” concludes Cabrero.

The Bank of Japan is still not raising interest rates

The Bank of Japan continues to swim against the tide of the rest of the major global central banks and in today’s decision left interest rates unchanged at -0.10% to ensure that inflation continues to fall.

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The monetary body also maintains other economic policies to ensure there is stimulus when the economy contracts and also maintains control over bond yields.

The “T-grade” reaches 4.5% for the first time

At the end of the session this Thursday, the 10-year US Treasury note marked a required yield of 4.5% for the first time since 2007, indicating that the market now expects the Federal Reserve to make another such hike will year and, above all, that the pace of declines next year will not be as fast as expected.

Nation World News Desk
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