Market rebounds after a volatile week on recession and cryptocurrency concerns

Reuters: Bitcoin has set a record losing streak as the ‘stablecoin’ collapse overwhelms cryptocurrencies.

Cryptocurrencies suffered heavy losses on Friday with close to $30,000 in bitcoin trading and record losses with the collapse of the so-called stablecoin TerraUSD. Reuters report.

Cryptocurrency assets have also swept risky investments extensively due to concerns about high inflation and rising interest rates. Sentiment is particularly vulnerable as tokens that should be pegged to the dollar have been shaken.

Bitcoin is the largest cryptocurrency by total market value, trading at $30,300, up 5% in the Asian session. There was a recovery from a 16-month low of around $25,400 reached on Thursday.

However, that’s well below the level a week ago of $40,000 and is heading towards a record seventh straight week of losses unless weekend trading rebounds.

“I don’t think the worst is over.” said Scottie Siu, Director of Investments at Axion Global Asset Management, a company that operates crypto index funds based in Hong Kong. more here.

Bitcoin price on a candlestick chart showing losses over the last 7 weeks
Bitcoin price on a candlestick chart showing losses over the last 7 weeks Photo: Refinitiv

European market opens higher

European markets are feeling relieved this morning as stocks rise after a shaky week.

In New York City, the FTSE 100 index rose 71 points, or 1%, led by the online grocery business. okado – 5% increase (but still 50% decrease this year).

Financial-led rally… standard charter (+3.2%) and Prudential (+2.8%) on the riser.

Susanna Streeter, Senior Investment and Market Analyst at Hargreaves lance downsays:

”Investors are grappling with inflation concerns as oil prices rise again and supply concerns resurface amid continuing geopolitical tensions.

As the era of cheap money comes to an end and the market becomes less liquid, trades will remain volatile in future sessions. On Wall Street, the S&P 500 left a bit of a bear market before rebounding and is growling in the specter of stagflation circling the economy.

Introduction: The market was hit by a crisis after a volatile week.

Traders at work at the NYSE in New York last night.
Traders at work at the NYSE in New York last night. Photo: Brendan McDermid/Reuters

Good morning. Welcome to our rolling coverage of business, global economy and financial markets.

It’s been a dull and confusing week in the market. The volatility was fueled by growing signs that the global economy is slowing and fears of a recession in some major economies, including the UK.

Wall Street is having its worst week since early January as the S&P 500 fell more than 4.7% since Monday morning.

that’s it S&P 500 It is the sixth straight week of loss, the worst weekly loss since 2011, when it fell for the sixth straight week despite the eurozone debt crisis.

Last night the S&P 500 fell on the verge of a bear market as fears of global economic health, high inflation, interest rate hikes and supply chain collapse hit assets.

This year's S&P 500
This year’s S&P 500 Photo: Refinitiv

Jim Reedmarket strategist Germany Banksaid to have had “unbelievable intraday volatility” across various asset classes.

At one point in the New York afternoon, the S&P 500 fell -1.94% from its lows, just below the -20% decline since its all-time highs that marked the official start of a bear market. .

However There was a big recovery in the last hour, meaning the index posted a modest decline of -0.13% on the day, despite still hitting its one-year low. Futures markets are suggesting that the rally will be extended today, with the S&P gaining +0.92% this morning.

But even if we do see that kind of recovery, The major losses we’ve already seen this week mean that it’s the first time in a decade that the index has lost six weeks in a row.

The turmoil in the cryptocurrency market has increased tensions in the broader market. collapse of teraUSD This week, and the associated Luna coin, showed the dangers of a stablecoin claiming to be pegged to a specific asset.

The panic intensified yesterday when Tether, another major stablecoin, failed to maintain its link with the US dollar. Tether (scheduled to peg at $1) has fallen to 95 cents… It has recovered but has not yet recovered its peg of $1.

Contrary to some reports, the tether did not regain its immobilization. 30bps off now from 0.997. It may sound like a no-brainer, but it’s relatively large compared to the historic arb, and hasn’t changed since the first shake. Same price as UST traded on May 8-9

— TheLastBearStanding (@TheLastBearSta1) May 13, 2022

rating group paintbrush The issue between Tether and TerraUSD “will highlight the fragile nature of private stablecoins and accelerate regulatory demands,” he said.

The shake caused Bitcoin to drop to a 16-month low of $25,000 last night, but bounce back to $30,000 this morning. Reuters reports that Bitcoin has been posting weekly losses for the seventh straight week.

Investors are saddened that the US economy could suffer a ‘hard landing’ as interest rates soar.

Overnight Fed Chairman Jerome Powell warned that a ‘soft landing’ could be out of control.

Powell told NPR’s “Marketplace” that high inflation and economic problems outside the US could hamper his efforts to lower prices without causing a recession.

“Whether or not a soft landing can actually happen will depend on factors beyond our control.

There is a huge, geopolitical event going on around the world that will play a very important role in the economy in the next year or so.”

Chairman Powell also hinted at the June and July meetings that the Fed would push for a 50bps hike. And he warned that lowering inflation to its target “will also entail some pain” but will be even more painful if inflation is fixed.

After a measurable sell-off in global equities this week, especially in the tech sector, Asia rose more than 2% this morning. Europe/US indices threaten a similar bearish rally. Bitcoin plummeted this week – Oil $109. Opening Phone: FTSE +72 @ 7305 DAX +148 @ 13887 CAC +70 @ 6276 DJIA +220 @ 31950

— David Buick (@truemagic68) May 13, 2022


  • 10am BST: Eurozone Industrial Production Report for March
  • 3pm BST: University of Michigan’s US Consumer Sentiment Survey
  • 5pm (BST): Russian

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