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Once again, the games of retail investors on Reddit with the shares of GameStop have collapsed the markets (we expect the decline in pairs



DATE OF PUBLICATION: 2021-02-26 09:50:19 The renewed merrymaking through Reddit with the shares of GameStop again collapsed at first the American stock market, and then this wave of negativity swept across Europe and moved today to Asia. What was this and what is the main reason for the growing tension in the global financial markets? Earlier this week, Fed Chairman J. Powell managed to calm financial markets, which led to an increase in demand for growth stocks – securities of industrial, commodity and other companies, which were under pressure during a coronavirus pandemic. This pushed the industrial DOW 30 to new highs and the US dollar came under pressure. But that is not all. The US Central Bank governor’s confidence that the surge in inflation in the country will be limited and that the regulator is even ready to allow the economy to overheat for the sake of economic growth has led to the cessation of the rise in Treasury yields. The United States, which led to a sell-off in the local stock market, which in turn was fueled by renewed merrymaking through the Reddit platform with GameStop shares. Stock indices fell, but not as critical as in January. In any case, today before the opening of trading in Europe, there is a rollback of futures on European and American stock indices, and the local strengthening of the American currency has stopped. And Treasury yields are also correcting downward. So the yield of the benchmark of 10-year Treasuries after reaching a local maximum of 1.1614% corrected downward and at the time of this writing is at around 1.1474%. Whether the activity on the Reddit platform will resume, as well as the growth of government bond yields, is still unclear, but if this does not happen today , then we can expect a rebound in both indices and a depreciation of the dollar in the Forex market. In general, everything that happens in the markets indicates that the situation in the markets remains extremely fragile. Even such an array of positives (and this is the expectation of a strong economic recovery in the wake of the spread of vaccination of the world’s population, and all kinds of measures to support the economies, which is only the expected stimulus in America with a total volume of $ 1.9 trillion, as well as the madness of investors who are trying to buy almost everything fearing that they will not have time to jump on the last carriage of the train moving towards financial success) may not resist the realities of strong inflation in the United States, which, whether the Fed wants or does not want, will force it to start tightening monetary policy, which will ultimately lead to a reversal in equity markets and the beginning of a long-term strengthening of the US currency. Forecast of the day: After a sharp recovery on Thursday, USDCAD may resume its decline today if market sentiment improves and oil prices recover. In this case, the pair could fall to 1.2475 after falling below 1.2600. GBPUSD is trading lower on the back of growing demand for the US dollar and lower risk appetite in the markets. If the pair consolidates below 1.3940, it may fall to 1.3855. Material provided by InstaForex – www.instaforex.com Source – InstaForex

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