The rebound of US stocks has reached the resistance level.
I believe people who long the stocks in July have already gained a large floating profit.
After the consecutive rally in July, the opening in August will not be very optimistic. What's more, the financial report of US stocks didn't present many surprises so far.
The U.S. Treasury yield continues to fall, and it has fallen below the support level.
The market is still actively betting on the slowdown of the Fed's rate hike path.
However, the new geopolitical event just happened made it possible for the Fed to reverse its policy.
The balance between the market and inflation is now tilted to the inflation side.
Although many tests showed good results, I think this geopolitical risk may aggravate the global market volatility.
According to historical statistics, the volatility of VIX increased the most in August.
While in July, after the US stock market bottomed out and rebounded, it achieved the biggest monthly increase in many years.
However, if the US bond yield continues to rise and CPI is still likely to soar, it is made 100bps become possible again.
After all, black swans like Pelosi visit are also unpredictable small probability events.
Judging from the latest interest rate hike expectation, the probability of interest rate cut is greatly reduced (green), while the probability of interest rate hike (red) has soared due to the impact of this event.
Why, because the market expects China to sell US debt, the US CPI will rise. U.S. Treasury yields have also risen sharply, and everything is developing towards a bad direction.
We should observe the development of this taiwan event very carefully, because this may be the beginning of future market turmoil.
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