Spreadex Market Update
Adani Group Sees Huge Short Selling Linked to Fraud Accusations
Equities Pressure By Adani Story
Equities are seeing a softer start to the week as the massive short-selling in the Adani group hits sentiment. With risk of further fallout this week as well as fears of potential contagion, markets looks vulnerable to further downside ahead of the week’s central bank meetings which get underway on Wednesday with the Fed.
US Stocks Shrug Off Earnings Weakness
US earnings season sees its busiest week this week with 109 companies due to report. So far, the earnings picture in the US has been a little worse than expected. Industry data shows that 69% of companies have beat estimates, below the 73% 10-year average. Despite this, US stocks remain up on the year with last week’s bumper Tesla results having done a lot to underpin sentiment.
EUR Higher on Hawkish ECB Expectations
EUR is seeing the strongest performance across the European open on Monday. On the back of recent hawkish ECB commentary, any expectations of a less hawkish outcome or set of guidance from the ECB this week has been squashed. With that, EUR is gaining as traders look for the bank to continue pushing ahead with monetary tightening, creating divergence between the ECB and other central banks which should continue to drive EUR higher near-term.
Aussie Under Pressure
AUD has been the weakest performer so far today with the reversal lower in risk assets at the start of the week hampering the currency. Looking across the week there are upside risks for AUD should risk sentiment improve on a more dovish meeting from the Fed. However, selling might worsen if the Fed fails to deliver and sticks to a larger hike and/or more hawkish outlook.
Metals & Oil Turn Lower
In the metals and commodities space, gold and silver are both seeing a more muted start to the week. Gold prices continue to turn lower from recent highs though the move looks very much corrective now, keeping the bullish bias intact while silver remains caught in heavy consolidation near recent highs also. Crude prices have turned lower again at the start of the week amidst the broader decline in risk sentiment. News of a surge in Russian oil supply to Asia is dampening prices for now ahead of the next OPEC+ meeting.
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