Bears Return on Wednesday

Bears Return on Wednesday
Monday and Tuesday brought some relief rallies to the markets. However, they did not last long as Wednesday started with solid selling, sending down stocks, commodities, and most of the USD pairs.
US equity indices were down 2% during the London session, EU bourses also lost circa 2%, while the dollar index pushed above 105. As a result, the EURUSD pair returned below 1.05. 

Later today, Federal Reserve Chair Jerome Powell is due to testify on the Semi-Annual Monetary Policy Report before the Senate Banking Committee in Washington DC. He is expected to stay hawkish, possibly hinting at a 75 basis points rate hike at the Fed's July meeting. 

Incoming recession

Prior to Fed Chair Jerome Powell's speech before Congress, traders were concerned about an economic downturn in the United States, the world's top oil buyer. As a result, the WTI oil fell circa 5% and was on its way to the psychological 100 USD level. 

According to Reuters, President Joe Biden is anticipated to call for temporarily suspending the federal 18.4-cent per gallon gas tax on Wednesday. On Thursday, the president will meet with seven significant oil corporations.

Additionally, Bloomberg reports that Citigroup experts now predict a roughly 50% possibility that the world economy will enter a recession. Meanwhile, Thomas Barkis, president of the Richmond Fed, stated that he did not anticipate that the US economy would continue to grow steadily for at least the next two years.
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