European markets are trading higher as traders are celebrating better-than-expected bank earnings out of Europe. We have banks like Barclays reporting strong numbers, but traders should keep in mind that overall higher interest rates in Europe and the UK represent a significant threat to the mortgage portfolios that these banks hold. Yes, they are setting aside big chunks of money to weather that storm, but what matters here is the intensity of that storm, and no one can really tell how strong that will be.
US stock futures are also trading higher as traders continue to celebrate the US tech giant’s earnings. We had strong numbers from Meta, which has boosted the risk appetite further among traders. Today, it will be more about Amazon’s earnings. There is no doubt that Amazon’s business is very sensitive to consumer spending, and we know that consumers have tightened their belts due to the cost of living crisis. A better-than-expected number could help the Nasdaq index score more gains today.
Economic Data
It is mainly about the US GDP data and the fear of a recession taking place in the US, as the Fed is very much expected to tighten monetary policy even further as inflation remains stubbornly high. The GDP data is expected to slow further, and it is widely anticipated that the number will print a reading of 2%. Anything that matches expectations may not derail the current momentum for the bulls, who are hoping that better-than-expected tech earnings are going to increase the appetite for riskier assets. However, if the GDP number falls below the forecasted level, we could see serious turmoil in the markets, and the US equity indices could experience a major selloff.
Bitcoin
Bitcoin is having tough times again as bulls are struggling to push the price beyond the $30K price level. However, for the past couple of days, we have seen bullish price action for the BTC price, and there are still hopes that this momentum will pick up pace as the dollar index loses some strength. Another important factor that BTC bulls are also keeping a close eye on is the Fed meeting, which will take place next week. It is anticipated that the Fed will increase rates again, and that could bring some strength back to the dollar index, which may not be that great for the BTC.
Overall, crypto momentum is very much dependent on the BTC’s price action, and if the price breaks above the 30K price mark, only then could we see more FOMO building up among traders.
