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28.04.202313:36 Forex Analysis & Reviews: US premarket trade on April 28, 2023. Stock market down amid rising fears

Futures on US stock indexes have fallen as the tech companies' rally has weakened, and persistent inflationary pressure has reinforced expectations of further interest rate hikes in the US and Europe. Treasury bonds have risen.

Futures contracts on the S&P 500 and Nasdaq 100 have fallen by about 0.3% each, as Amazon.com Inc.'s report about weak growth in its core cloud computing business dampened investor sentiment. Treasury bonds recovered some of Thursday's losses, with the yield on 10-year bonds falling by about five basis points. The policy-sensitive two-year rate remained above 4%.

Exchange Rates 28.04.2023 analysis

Markets remain tense as data ahead may indicate an unexpected surge in inflationary pressure in the US, which will reinforce expectations of an interest rate hike by the Federal Reserve next week and possibly again in June.

Meanwhile, in Europe, economic recovery in France and Spain has not helped achieve the predicted result of 0.2%. In the first quarter of 2023, the eurozone economy added only 0.1% after no growth in the fourth quarter of 2022. Europe is likely to prevent a recession, but a surge in consumer prices indicates further interest rate hikes by the European Central Bank, which will not bode well for lending and the overall economy.

The decline in the European benchmark Stoxx 600 index was driven by these concerns. The Stoxx 600 Banks Index demonstrated the largest decline in a month due to resurging inflation.

Meanwhile, the Bank of Japan has resumed its commitment to stimulating the economy. It left its rate at minus 0.1% at the first meeting under new Governor Kazuo Ueda, maintaining the cap on the yield of 10-year bonds at 0.5%.

Exchange Rates 28.04.2023 analysis

In other markets, oil prices have risen for the second day in a row, but this is not enough in the long run, as traders are shying away from speculating on this asset due to concerns about slowing growth in the US and Asia.

As for the technical outlook for the S&P 500, risk sentiment improved yesterday but the instrument may rise only after the US economic data is out. Bull will need to protect the area of $4,116 from where the price can move higher to $4,150 and $4,208. Buyers will also need to maintain control of the level of $4,229 which will strengthen the bullish market. In case of a decline amid the prospect of a further rate hike and a possible recession, bulls will have to assert their strength at $4,116. Its breakout will push the price back to $4,091 and will open the way to the level of $4,064.

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