Recently, we've asked Alex Kuptsikevich about current situtation on markets. Cryptocurrency market remains in an unstable situation so do indices. What's more we're on the verge of release of crucial macro data from the USA such as core durable good orders and building permits which go public later today.

Indices - are we past dips yet?

Despite some slippage in the indices over the last two weeks, it is more likely that the bottom has already been passed. Our expectations have quite a few "buts" and "ifs". Nevertheless, the working scenario assumes that the peak of fear by the markets has already passed. The Fed is preparing the markets for further rate hikes but is prepared to slow down. Inflation data and lower commodity prices and freight costs play into this scenario. In the current environment, the different indices are moving up at different speeds, and some points are not making new highs as dramatically. Still, nevertheless, their move up has probably already begun. In the indices, we see the Dow Jones outperforming the Nasdaq, as the latter is and will remain under pressure from interest. The indices also behaved the same way, starting their recovery in 2002, when they had to rise at non-zero interest rates.

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Crypto crash...?

The latest cryptocurrency crash promises to repeat the history of the previous crypto-winter when a year-long decline was followed by a 16-week sideways slump from November 2018 to March 2019. But in this case, it is worth looking for analogies not with the duration but with the fragility of the recovery that will follow even after the market has settled down.

Core Durable Goods Orders and Building Permits are released this week - how crucial are these prints ahead of the December Fed meeting?

The Fed is likely to focus now on inflation and employment, which have already thundered away, and a new batch (NFP) is not expected until late next week. Durable goods orders - as an indicator of business sentiment - could worry the markets if they diverge significantly from expectations. It would be especially unpleasant for the markets if they see firm orders growth - it would be seen as a signal for the Fed to continue raising rates as fast as possible. New-home sales are likely to continue to fall - and there is no game changer here for the Fed: this market was bloated, is now deflating, and there is still a long way to go before a depression. The biggest attention of market participants is expected to be on the Fed minutes, also coming out on Wednesday evening.