A hard week for stocks market

European indices are finishing the second consecutive week in red showing the overall negative mood on global financial markets. The key fundamental bear factor is the inflation. It is the exact reason for the aggressive key rates elevation by the majority of the word’s central banks.

Pay your attention to the DAX chart. Daily frame clearly shows that the quotes have reached a very strong support level of 12 450. The break through the level may provoke a giant sales wave.

EURO STOXX 50 quotes have entered a so called accumulation zone 3380-3400. A breakthrough and fixation on this level may confirm that the buyers are ready to keep on the decline in the middle term period.

Dow Jones (us 30) isn’t much better. It is a bit higher the last year’s minimums. So the probability of a rapid decline is also high.

With the negativity and sales on the background, the Airbus SE stocks are leading the DAX and EURO STOXX 50 indices. Also we see a moderate optimistic mood in Spain’s financial sector. Overall direction is still bearish.

Bonds market:

There aren’t any global changes in the EU and the USA bond markets. But there’s still a moderate growth in the 10-year yields profitability. Considering the current ECB and FED policies, this trend may continue in the nearest future. The American and European regulators’ representatives expecting high inflation levels not only till the end of the current year, but also in 2023. So, there’s a risk of further long term yields growth.

Oil market

The American WTI is traded at minimums since the middle of January this year. The overall dynamics remains negative with the FED increasing key rates which also restrict business activity. The same is with Brent, it is back below $88 per barrel, it may provoke a giant wave of sales.

An additional bear factor is China, its economic growth slowed down due to strict quarantine restrictions.

Key events

The purchasing managers index (PMI) keeps on going down in the Europe’s manufacture and services sectors. France with that demonstrates growth in the services sector. So there is a probability French companies from this sector may demonstrate relatively bad results.