European stock futures fall another 0.4%, global market risk appetite shifts towards safe-haven assets

European major stock index futures continue to come under pressure. According to the latest news, European STOXX 50 index futures and German DAX index futures both declined by 0.4%. This is not an isolated event but a continuation of the systemic decline in global risk assets that began on January 19. Two days ago, these futures experienced even larger drops, with STOXX 50 down 1% and DAX down over 1.1%. Market pressure stems from a triple combination of escalating geopolitical tensions, failed rate cut expectations, and heightened risk aversion sentiment.

Divergence in Global Markets

Risk assets decline across the board

U.S. stock futures are also under pressure, with Dow Jones futures down 0.69%, S&P 500 futures down 0.82%, and Nasdaq 100 futures down 1.13%. The cryptocurrency market’s performance is even more extreme, with Bitcoin briefly falling below $92,000, nearly a 3% intraday decline; Ethereum down 3.5%. As of January 19, nearly 240,000 traders were liquidated across the market, with total liquidation amounts reaching $680 million.

This indicates that investors are systematically withdrawing from risk assets.

Safe-haven assets strengthen

In stark contrast, traditional safe-haven assets are performing strongly. Spot gold briefly surged past $4,690 per ounce, hitting a record high, with an intraday increase of nearly 1.8%. Spot silver also hit a historic high, surpassing $94 per ounce, with an intraday gain of over 4%.

This divergence reflects a clear shift in market sentiment: from a “risk appetite” mode focused on growth to a “risk aversion” mode.

Sources of Market Pressure

The low opening of Asia-Pacific markets also confirms the widespread nature of this pressure. The Nikkei 225 and Topix both fell about 1% at the open, and the 10-year Japanese government bond yield rose to 2.215%, the highest since February 1999. This indicates concerns about the global economic outlook are not limited to Europe.

Vulnerability of the Crypto Market

It is noteworthy that, amid this global decline in risk assets, cryptocurrencies are the most vulnerable. Bitcoin and Ethereum have fallen more than traditional stocks, reflecting two phenomena: first, the crypto market is more sensitive to risk sentiment; second, when markets truly enter risk-off mode, crypto assets are still positioned as risk assets rather than safe havens.

This sharply contrasts with the strong rise of traditional safe-haven assets like gold.

Follow-up Focus

From January 19’s sharp decline to the continued slide on January 21, the persistent pressure indicates that this is not a short-term fluctuation but a re-pricing of market fundamentals. The key points to watch are whether this risk aversion will further spread and whether it could trigger liquidity risks or a chain reaction of leveraged liquidations.

Summary

Global markets are experiencing a shift from risk appetite to risk aversion. The continuous decline of European stock futures is not an isolated phenomenon but part of systemic pressure affecting U.S., Japanese, and even crypto markets. The contrast between gold reaching new highs and cryptocurrencies plunging vividly demonstrates investors’ reassessment of different asset classes. In this market environment, the pressure on risk assets may persist further, and the crucial question is whether new signals will emerge to change market risk sentiment.