Inflation and Fed meeting uncertainty cause stock markets panic and bitcoin plunges


The Spanish index struggles to maintain the 8,200 mark, with the banking sector being one of the hardest hit. Cryptocurrency loses $24,000 level

quote screen
Quotation screen at the Palacio de la Bolsa in Madrid.EFE

Too much uncertainty about the future of prices and the growth of the economy so as not to hurt the markets. european stock market live Panic Monday Which has set a red color in the main indices of the sector due to increase in global inflation and tightening of monetary policies.

Last week it was ECB’s turn and this week all eyes are on Wednesday’s meeting US Federal Reserve (Fed), which is likely to announce new rate hikes after confirming on Friday that inflation in the country not only fell as expected but rose to 8.6% from 8.3%.

This news hit the market last Friday and this Monday the digest of these figures is going on. ibex 35 It drops around 1.9% and struggles to maintain the 8,200 mark on the day; Still, it is not the worst of its European peers, having lost more than 2% in the middle of the session.

In Spain, almost all prices remain negative, with the exception of Naturgi, Red Electrika and Siemens Games, opposite direction is hotel Melik (-5.1%) and the banking sector, which has been hit hardest by the bearish wave prevailing among investors today. sabadell bank about 4% left; Santander and Bankinter3.3% more BBVAand 2.3%.

“It is true that a rising interest rate environment should be considered a positive factor for banks, as the higher the interest rate, the higher the returns. However, when interest rates rise, it can cause a significant slowdown in economic growth. is, as is the case at the moment, and this could result in a period of stagnation in the economy, so the situation is not so good for the banks now”, remarks Sergio VillaAnalyst at IG Markets. “Periods of low growth or economic distress translate into fewer investment projects by companies and less giving of both mortgage and consumer loans,” he says.

But the pressure is not just in stocks. The emphasis is on European sovereign bonds after ECB meeting and risk
The “fragmentation” that could lead to net debt purchases and a rise in the eurozone for the first time in the past 11 years.

As a result of this pressure, spanish risk premium This has been raised to 129 basis points this Monday and the return on Spanish bonds with ten-year maturity is 2.888%, compared to 1.569% on Spanish bonds. dam German which is taken as reference. This represents the biggest difference between the two since May 2020, when it was around 70 basis points last January and slightly up from 60 basis points a year ago.


The panic of investors is also reflected in cryptocurrencies, especially among the most popular of the thousands that exist. Bitcoin There was a 14% crash on the day, dragging it to $23,500, a level not seen since December 2020.

The digital currency has lost over 65% from the high of 70,000 euros marked in November 2021. Since then, volatility has increased among its investors and dragged the rest of the virtual currencies into its wake. Ethereum back over 18% this Monday; carcanoabout 13%; solana17% more dogecoinvery.

“From a technical perspective, we are testing the support area of ​​the channel marked by $27,500-32,000. This type of position, in the context of current fears, usually ends with a breakout of the lower area and a target of 24,000. Note, This level is very important as it represents the year’s low and the weighted average purchase price of all bitcoins issued; Losing them opens the way to $19,400 or $20,000. Above, a recovery of 30,000 indicates that this downside scenario will be reversed in the second term, but it will not be until prices see above 32,000 when the real threat is averted,” he explains. Huh. Javier MolinaSpokesperson in Spain for a multi-asset investment platform eToro

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