Rate hikes week has European markets open with mixed feelings, crypto still struggling

European markets open mixed as fears surge that monetary policy tightening could lead to global slowdown  

European markets were higher on Friday following steep losses in the previous session amid fears that more monetary policy rate hikes could lead to a global slowdown.  

Germany’s DAX was higher by around 1% and France’s CAC 40 and the FTSE 100 followed with similar gains.  

Main European indices on Thursday saw colossal losses. The DAX closed 3.3% lower, the CAC 40 was down 2.4% and the FTSE 100 was down 3.1% as global central banks are tightening monetary policies to calm surging inflation. This is fuelling worries of a significant economic downturn.  US futures are higher after a sharp decline for Wall Street on Thursday.

Oil prices bullish despite demand concerns triggered by rate hikes  

Oil prices were bullish on Friday morning despite demand concerns growing following the week’s rate hikes.  

Brent Crude futures were 0.38% higher Friday morning valued at surging past the $120 a barrel mark. West Texas Intermediate (WTI) futures were also higher by 0.40% costing $118 a barrel.  

On Thursday, the United States has imposed a number of fresh sanctions on several Chinese and Emirati companies as well as a group of Iranian petrochemical firms accusing then in sanction evasion by aiding the sale of petrochemical products abroad. This has also triggered a surge in oil prices.  

Gold futures slightly higher  

Gold futures were a little higher on Friday morning, rising by 0.11% to $1,851.85/oz. Silver futures were also bullish rising by 0.18% while palladium futures surged by 1.43%.  

Platinum futures were lower, on the other hand, falling by 0.18%.  

Tesco sales dipped this quarter as shop warns of “challenging market environment”  

Tesco, the popular British retail company, announced on Friday that its sales largely dropped in the three months to May and warned of an “incredibly challenging market environment” as prices on goods surged amid record high inflation.  

The company saw sales drop in the UK by around 1.5% between March and May, compared to the same period last year.   

Comparable sales were 2.0% higher year-on-year and 9.9% higher from the same quarter in the last year before the COVID-19 pandemic.  

When adjusted for inflation, which currently stands at 9%, the numbers provided by Tesco suggest a clear decline in sales volumes over both periods.  

“Although difficult to separate from the significant impact of lapping last year’s lockdowns, we are seeing some early indications of changing customer behaviour as a result of the inflationary environment. Customers are facing unprecedented increases in the cost of living and it is therefore even more important that we work with our supplier partners to mitigate as much inflation as possible,” Tesco’s Chief Executive Officer Ken Murphy said in a statement. 

Tesco shares are volatile, opening nearly 1.0% higher, but soon dropped by 0.44% and are currently around 0.10% lower than their open value. 

Jerome Powell says Central Bank is not deliberately trying to cause a recession  

The Federal Reserve’s Chairman, Jerome Powell, said that the Central Bank is not deliberately trying to cause a recession and that the economy is on solid footing.  

Despite that, markets are expecting a recession as data show the economy is nowhere close to stabilising.  

On Wednesday, the Federal Reserve made the decision to raise benchmark interest rates by 75 basis points, the largest move in 28 years.  

Top cryptocurrencies are bearish, BTC still above $21,000  

Top cryptocurrencies were bearish on Friday morning with the BTC struggling to surge past $21,000 values. 

Ethereum (ETH) was down 5.54% in the past 24 hours standing at $1,100 values, BNB dropped by 1.26% in the past day, Cordana (ADA) was down 1.11% and Solana (SOL) was 3.16% lower.  

The popular Elon Musk-endorsed memetoken Dogecoin (DOGE) was 1.33% lower.  

Bill Gates says NFTs and crypto are “100% based on greater fool theory” 

Microsoft co-founder Bill Gates said on Tuesday that non-fungible tokens (NFTs) and cryptocurrencies are “100% based on greater fool theory.” He added that investors are willing to make money on worthless or overvalues assets as long as people are willing to bid higher.  

Instead, the business magnate mentioned that he much rather prefers “traditional” investing like asset classes. 

His comments came as crypto markets are going through a bear market with bitcoin (BTC), the top cryptocurrency by market capitalisation falling to $21,000 from its November 2021 near $50,000 highs.  

Note, cryptocurrency CFD trading is restricted in the UK for all retail clients.