The financial markets faced a turbulent start to the week, as Solana's recent correction led to significant liquidations and global inflation expectations soared. Over $26 million in liquidations occurred within the last 24 hours, contributing to a staggering $110 million last week. Meanwhile, the US 5-10 year consumer inflation expectations reached a 3.5% mark, the highest since 1995, fueling concerns among investors.
In Europe, the German Conservative Party's victory in the federal election sparked hopes for an improved economic outlook. This political shift has buoyed the euro and European equity futures, as investors anticipate increased government spending. Despite these positive signs, the US dollar index slipped below its 100-day moving average, as it approaches a significant Fibonacci level from the September to January Trump rally.
On Wall Street, US stocks suffered an "ugly selloff" after weaker-than-expected economic data and rising inflation expectations dampened market sentiment. Investors are closely monitoring the Federal Reserve, which may cut interest rates more than previously anticipated, mirroring actions taken by the UK. This development could affect repo rates and bill appreciation in the US financial landscape.
Solana's price continued its decline, trading around $160 on Monday after an 11% fall last week. The cryptocurrency's downturn highlights broader market volatility amid ongoing economic challenges. Meanwhile, the price of gold struggled to gain traction, remaining confined to a multi-day-old trading range in early European trading sessions.
Crude oil prices also faced pressure, clearing the 100-day moving average support and tumbling by more than 3% on Friday. This decline adds to investor concerns about potential global trade tensions, as fears persist that former President Donald Trump's trade tariffs could incite a global trade war.
The EUR/USD exchange rate pared gains, dropping back below 1.0500 during Monday's European session. Market participants remain cautious, awaiting key economic updates later in the week. Notably, Nvidia's earnings and the latest US GDP and Personal Consumption Expenditures (PCE) reports will be closely watched by investors.