Risk Off mood swirled as Europe’s largest nuclear power complex was targeted in Russian/Ukrainian fighting, 5 of the 6 reactors have been safely shutdown. Safe havens from USD to US Treasuries continue to rally and Oil & GOLD markets hold their gains, lifting commodity currencies. Asian stock markets crashed (Nikkei -2.5%) EUR is testing 24-month lows. US markets closed lower on mixed US data (PMI’s disappointed but Initial Claims were better than expected), despite some big gains from retailers. Fed Chair Powell was a tad more Hawkish in his second day of testimony. US sanctioned more Russian oligarchs. Ukraine and Russia reached an understanding on a joint provision of humanitarian corridors for evacuating civilians.
- USD (USDIndex 98.02). Cooled from 98.08 (May 2020 high) earlier as nuclear power plant fire is contained. Rallied through 97.00 most of yesterday. 97.75 next resistance.
- US Yields 10-yr up to 1.844 on close – off 6 ticks lower to 1.785% now.
- Equities – USA500 -23pts (-0.53%) 4363. US500 FUTS down at 4341 now.
- USOil – Rallied to $112.56, yesterday, $106.10 now.
- Gold – Rallied to $1950 earlier, $1936 now.
- Bitcoin under 42K levels to trade at $43,300.
- FX markets – EURUSD back under 1.1010, USDJPY holds 115.40 and Cable down to 1.3320 now.
European Open – The March 10-year Bund future is up 50 ticks at 169.71, U.S. futures are also higher across the board, as investors head for safety once again. The Russian attack clearly has rattled nerves and left investors seeking safety in bonds and the Greenback. DAX and FTSE 100 futures meanwhile are down -1.97% and -1.10% respectively. Developments in Ukraine may even overshadow todays’ US payroll report.
Today – EZ Retail Sales & Construction PMI, US Labour Market Report.
Biggest FX Mover @ (07:30 GMT) EURAUD (-0.72%) Collapse from 1.6200 in mid February continues down to 1.4975 now. MAs aligned lower, MACD signal line & histogram below 0 line, RSI 14 OS but still falling, OB zone, H1 ATR 0.0020, Daily ATR 0.0100.
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Stuart Cowell
Head Market Analyst
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