A note via Macquarie bank analysts pointing to opportunity in markets now.
Says Monday’s price action was ‘stampede’, citing a definition including “frightened animals or people run together in a wild and uncontrolled way to escape from something”.
Says the ‘something’ was a combination of:
perception the Federal Reserve is behind the curve in cutting ratestech bubble concernsYen carry trade unwinding
But, dismisses these:
US economy can avoid a recessiontech valuations are not close to bubble levelsUSD/JPY is back to levels last seen in late 2023, the fundamentals for the carry trade remain in place
Acknowledging the inherent nature of markets:
stampedes are inherently unpredictable
But
“we view it is closer to irrational, thus creating buying rather than selling opportunities”
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S&P 500 daily candles:
This article was written by Eamonn Sheridan at www.forexlive.com.
