Stocks lower ahead of week filled with massive macro risks, Spain’s hot CPI report, Germany contracts, crypto drops

US stocks are selling off in what will be a massive week of corporate earnings, a key Fed decision, and an employment report that should keep wage pressures alive. The January rally has hit a wall and probably won’t have a chance of returning until we get beyond Wednesday’s Fed press conference and Apple’s results after the Thursday close.


Treasury yields are rising after Spanish inflation unexpectedly surged, delivering its first acceleration with the annual pace in six months. For the most part, disinflation trends have been firmly in place across the US and Europe, so Spain’s hot inflation report is a big red flag that the rest of the eurozone might show inflation is already proving to be stickier than what the market was expecting. ​ ECB hawks won’t have trouble pushing for a half-point rate rise this week. ​ If inflation pressures for the region remain elevated over the next two months, the ECB will need to remain aggressive at the March meeting.


Germany’s preliminary GDP reading for the fourth quarter was very disappointing and suggests Europe’s largest economy is technical recession bound this quarter. The outlook is darkening quickly as the economy gets hit with higher energy prices, weakening demand, and rising inflation trends.


Inflation risks are quickly cooling what was a rather impressive month for crypto. ​ Bitcoin is declining as Wall Street becomes very defensive ahead of this week’s major risk events. The Fed is poised to downshift its tightening pace again, but they could argue that they will keep rates higher for longer and not cave at the first chance to cut rates. ​ For crypto to have any underlying support given all the regulatory and contagion fears, inflation risks need to go away. ​ Bitcoin has massive resistance at the $24,000 level, so if risk aversion remains in place, downward momentum might not find major support until the $21,000 region. ​ ​

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Ed Moya

Ed Moya

Contributing Author at OANDA
With more than 20 years’ trading experience, Ed Moya was a Senior Market Analyst with OANDA for the Americas from November 2018 to November 2023.

His particular expertise lies across a wide range of asset classes including FX, commodities, fixed income, stocks and cryptocurrencies.

Over the course of his career, Ed has worked with some of the leading forex brokerages, research teams and news departments on Wall Street including Global Forex Trading, FX Solutions and Trading Advantage. Prior to OANDA he worked with, where he provided market analysis on economic data and corporate news.

Based in New York, Ed is a regular guest on several major financial television networks including CNBC, Bloomberg TV, Yahoo! Finance Live, Fox Business, cheddar news, and CoinDesk TV. His views are trusted by the world’s most respected global newswires including Reuters, Bloomberg and the Associated Press, and he is regularly quoted in leading publications such as MSN, MarketWatch, Forbes, Seeking Alpha, The New York Times and The Wall Street Journal.

Ed holds a BA in Economics from Rutgers University.