Fears of Interest Rate Hikes Grip the Markets

Market News Summary

European indices closed lower yesterday, as economic data raised concerns about another interest rate hike in both Britain and Sweden, in addition to other data indicating a potential recession in the Chinese economy.

The STOXX600 index closed down around 0.9% at 455 points, after touching its lowest level in over a month during yesterday’s session. The FTSE100, the British index, dropped by about 1.57% to 7389 points. The Stockholm index fell by more than 1%, while the French CAC index declined by about 1.10% to 7267 points. The German DAX index also decreased by 0.86%, reaching a level of 15767 points.

In Russia, following an emergency meeting aimed at mitigating the collapse of the Ruble, the Russian central bank raised interest rates by 350 basis points to 12%.

Dollar Index (USDX)

The Dollar Index has surged to its highest level in over a month, trading above the key level at $103. This comes after a report from the Department of Commerce showed that retail sales grew by 0.7% last month, exceeding expectations for a 0.4% increase. This indicates that the US economy remains strong.

Pivot point: 102.95

Resistance level	Support level
103.25	102.75
103.45	102.45
103.75	102.25

Spot Gold (XAUUSD)

Gold prices decreased on Tuesday, influenced by dollar movements and bond yields, despite expectations that the Federal Reserve would keep interest rates high for a longer period due to strong US data, which kept gold near its lowest level in six weeks.

The price of gold in the spot market settled at $1907.60 per ounce, after reaching its lowest level since June 29th at $1895.50 earlier in yesterday’s session.

Pivot point: 1903

Resistance level	Support level
1910	1894
1918	1887
1925	1879

Dow Jones Index (DJ30ft – US30)

US indices closed with significant collective losses on Tuesday due to higher-than-expected retail sales data, raising concerns about prolonged high-interest rates. Major bank stocks also declined following a warning from Fitch about potential credit rating downgrades.

The Dow Jones index declined by 1.02%, equivalent to around 361 points, marking its largest daily loss in 5 weeks and reaching its lowest level in a month, closing below 35,000 points. JP Morgan’s stock dropped by approximately 2.5% on Tuesday, recording its biggest daily loss in over 4 months, causing the bank to lose about $11 billion in market value in a single day.

Pivot point: 35125

Resistance level	Support level
35290	34835
35575	34665
35745	34380

US Crude (USOUSD)

Oil prices dropped over 1% on Tuesday, driven by weak economic data from China and increasing concerns about another US interest rate hike.

Futures for Brent crude declined by 1.5%, or $1.32, settling at $84.89 per barrel. Additionally, West Texas Intermediate (WTI) crude, the US benchmark, fell by 1.8%, or $1.52, reaching $80.99 per barrel.

Pivot point: 81.45

Resistance level	Support level
82.50	79.95
83.95	78.90
85.00	77.50

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