Morgan Stanley Forecasts Two Fed Rate Hikes and ECB Move

Morgan Stanley's forecast of two Fed rate hikes and an ECB move could suppress global risk appetite and create short-term selling pressure on equities. Technical indicators are already weak: RSI at 24 is in oversold territory and MACD is negative, but oversold conditions may lead to reactive buying. The price is trading below the 20- and 50-day moving averages, confirming the downtrend. If the news strengthens rate hike expectations, rising bond yields could further pressure equity valuations. However, the impact of the news may be limited as the market may have partially priced in such expectations.

GOOGL rose 5.76% in the last 24 hours to reach 349.48, with RSI14 at 73.5, placing it in overbought territory. Morgan Stanley's forecast of two Fed rate hikes and an ECB move signals tightening global liquidity conditions, which could pressure growth stocks. Although MACD is positive and above the signal line, the risk of short-term profit-taking has increased. While the news is not directly about GOOGL, macro interest rate expectations could negatively affect the technology sector. Therefore, in the 1-3 day outlook, a downward correction is more likely.

Morgan Stanley's forecast of two Fed rate hikes creates a mildly positive backdrop for the DXY in the short term, as rate hike expectations support the dollar. However, expectations of ECB action could create cross-pressure on the dollar index via the euro and limit the effect. Technical indicators show RSI around 60, neutral-positive, MACD slightly below the signal line, and price above SMA20/SMA50, indicating a limited upward bias. The 24-hour change is very small, so the news impact may not yet be priced in. Overall, the 1-3 day outlook is moderately upward, but confidence is low due to cross-volatility from the ECB.

Morgan Stanley's forecast of two Fed rate hikes and an ECB move could create downward pressure on EURUSD. While Fed tightening strengthens the dollar, potential ECB easing may weaken the euro. Technical indicators are already weak: RSI at 40 and MACD in negative territory, with price below SMA20 and SMA50. However, the news impact may be limited as the market may have partially priced in these expectations. In the short term, the 1.1500 support could be tested, but there is also a risk of a sudden dollar sell-off.