If Q1 was tough for crypto bulls, Q2 was an absolute catastrophe… As we head into the third quarter, the macro-outlook continues to be prone to be difficult for crypto, however we may very well be nearing a cycle low.
The second quarter of the yr has been a tough three months for the Financial institution of England (BoE) as inflation continued to soar – and is predicted to rise additional – whereas progress slowed to a crawl, sparking fears that the UK might enter a recession.
Our Q2 forecast for equities had centered round a mentality shift from a “purchase the dip bias” to a “promote the rip” with the Federal Reserve and central banks alike in a tightening overdrive to combat inflation pressures.
The Euro has steadily depreciated in opposition to a basket of main currencies since Dec. 2020. Tellingly, that turning level coincided with topping gold costs and the beginning of a creep larger in Fed fee hike expectations.
As anticipated within the Q2’22 gold forecast, the primary catalyst that drove gold costs larger in Q1’22 – the Russian invasion of Ukraine – proved to be a short-lived catalyst.
The Japanese Yen was hammered by markets within the second quarter. USD/JPY shot by the 2002 peak, touching its highest since 1998. A key driver of the Yen’s weak spot has been the Financial institution of Japan’s coverage divergence from its main friends.
The worth of oil has fallen roughly 20% from the 2022 excessive ($130.50) as US President Joe Biden takes additional steps to fight excessive power costs.
The Greenback carried out exceptionally nicely by the primary half of 2022 – and extra broadly over the previous yr.
Lots has modified from my Q2 Australian Greenback forecast from being one of many few currencies within the inexperienced in opposition to the U.S. greenback to virtually 4.6% down year-to-date.
Heading into final quarter I used to be giving BTC/USD the good thing about the doubt that it might rally, however for that to be the case it could have wanted to garner round of contemporary curiosity rapidly.
GBP/USD has remained humbled because the latter a part of final yr because the pair continues to be influenced by geopolitics.
At one level final quarter the U.S. inventory market was off by about 25%, with all losses coming within the first half of the yr.
The euro continued to lose floor in opposition to the U.S. greenback within the second quarter, extending the relentless decline that started simply over a yr in the past.
Gold costs head into the beginning of Q3 buying and selling simply above the target yearly open with XAU/USD nonetheless holding multi-year uptrend help.
The Japanese Yen fell greater than 10% versus the US Greenback within the second quarter as USD/JPY bulls pressed larger with almost unrelenting vigor.
Technical forecasts for oil are all the time difficult because the market is so closely pushed by basic elements like demand and provide, geopolitical uncertainty, conflict, the worth of the greenback, the state of the worldwide economic system and others.
The bullish USD development turned a year-old final month. And it may be tough to place into scope every part that’s occurred since then however, simply final Could, DXY was grinding on the identical 90 stage that had held the lows firstly of the yr.