We’re already more than halfway through 2022 and we’ve witnessed major market highs and lows that have pushed traders to their limits. While it may be challenging to stay ahead of economic events and maintain your confidence, it’s essential to remember that this is what CFD trading is all about. As you know, online trading comes with the risk of losing, and this is why to be a trader means to possess the discipline and skills needed to make the next trading move.
An all-around technical and fundamental analysis awareness can create an effective trading strategy that will enable you to understand market movements and more easily plan your trading day. Let’s take a look at some of the most prominent events that shook the markets in Q2 and their potential effect on the rest of the financial year.
Major Economic Events of Q2
Inflation: this economic phenomenon has affected all aspects of the economy and continues to shape the financial markets. Inflation occurs when prices go up as a result of increases in production costs caused by a surge in demand for services and products. Evidently, this has huge consequences on society that can prove to be destructive.
High inflation can make the stock market more volatile as we have seen during these months, with the stock market reaching record-breaking highs and lows. Eventually, an extended period of high inflation can lead to an economic recession which will have long-lasting impacts on society, including higher unemployment, and lower incomes, and traders and investors typically turn away from volatile markets as they seek safe havens.
The S&P 500 plummeted by -20.6%: this Q2 has been the worst half performance in the last 50 years for S&P 500. This has been the result of many factors including high inflation expectations, a tightening monetary policy by the Federal Reserve, and the devastating effects of the Russia-Ukraine war. This stock sell-off also enhanced recession fears, as traders and investors prepare for what’s to come when the economy takes a turn.
Crypto Crash: 2022 has been a bumpy road for major cryptocurrencies, to say the least. If you think about the fact that Bitcoin had managed to reach over 65,000 USD in 2021 and then fell just above 20,000 USD in June 2022, you may start to wonder if the crypto bubble is about to burst. In Q3 BTC is still struggling to stay above the 20,000 USD benchmark as traders are hesitating to make the move.
What could be next and what can you do?
The unpredictability of the global economy and the public’s reaction to it does not allow traders to rely on forecasts and predictions. In turbulent times like these, traders need to be aware of what’s going on and be able to understand how economic events can impact their trading positions. This means that it is always a good idea to take a step back to analyze market movements from every point of view.
Our team at XPro Markets has made sure that you can access the trading tools and resources you need to stay in the loop about everything that has to do with the global markets.