US equities under pressure as Tech tumbles to worst losing streak in 6 years

US equities returned from the Labor day holiday continuing from the selling pressures last week in anticipation of hawkish central bank policies and an ongoing energy crunch in Europe.

Tech was particularly hard hit as risk off remains the market narrative, the Nasdaq had its 7^th straight down day, it’s longest losing streak since 2016. The Nasdaq 100 is now down over 12% from the high of the bear rally in mid-August, and has blown through the important technical levels of the 50 day MA and 61.8% Fib retracement of that rally.

Tech wasn’t the only big mover as traders looked to take risk off the table, Bond yields also surged with the US 10-year surging around 13bp as investors priced in a more hawkish Federal reserve. This saw the USD outperform on a combination of a flight to safety and hawkish yield re-pricing saw the EURUSD break below 0.99 and the USDJPY rocket past 143 as yield differentials saw outflows from EUR and JPY to the USD.

Bitcoin was hammered lower, breaking the support level of 19500 that held in August and testing the lows of July. This on the back of the tech route and unconfirmed reports this may be initial dump of MtGox holdings that were seized by US and Japanese authorities previously.

Gold fell back with USD strength and rising yields seeing it testing its 1700 support level, Oil also dropped , giving back most of Fridays OPEC+ production cut rally, USD strength and growth concerns being a major headwind.

The big mover in commodities overnight though was US Natural gas which plunged over 7% , hitting a four-week low, as soaring output coupled with lower demand forecasts hit prices.

In today’s economic announcements, Australian GDP for Q2 is set to be released at 11:30 AEST where an increase of 0.9% is expected. After yesterdays fairly middle of the road RBA policy statement a reading inline with the forecast would be the most likely outcome and probably won’t see much movement in AUD or Aussie equities.

Later in the day, the Bank of Canada will be releasing their rate statement where a hike of 75bp is expected after Julys supersized 100bp hike surprised the markets.