Stagflation fears and trade tariffs trigger a global recession alarm. US stocks extend losses, WTI crude crashes, the dollar weakens, and EUR/USD surges. Our technical analysis covers key levels and market reactions
WTI crude plummeted
The major US stock indices continued to extend their multi-week impulsive down moves, where close to US$2.5 trillion value was erased from the S&P 500 over stagflation worries arising from US President Trump’s latest trade tariffs salvo.
The rising probability of a stagflation environment in the US has triggered a global recession alarm, which saw a horrendous 6% decline in WTI crude yesterday, its worst single-day loss since early September 2022.
WTI crude has a negative double whammy hit caused by demand and supply factors, as OPEC+ producers have agreed to boost the cartel's oil output by 411,000 barrels per day next month. The major support to watch on WTI crude will be at US$65.40/barrel.
The US dollar has now reversed its role as a “safe haven asset” due to capital outflow risk from US stock markets. The EUR/USD spiked up and recorded a rally of 1.80% yesterday, its best daily performance since November 2022.
The swift up move in the EUR/USD has led to several short-term momentum indicators flashing out overbought conditions ahead of today’s key risk events, US non-farm payrolls jobs data, and Fed Chair Powell’s speech.
The latest intraday technical analysis on US Wall Street 30, US Nas 100, Hong Kong 33, Japan 225, Germany 30, EUR/USD, GBP/USD, AUD/USD, USD/JPY, Gold (XAU/USD), and West Texas Oil can be found in our YouTube video above.
