Risk Off mood returned as stock markets dived and safe havens from the USD to US Treasuries rallied. Oil & GOLD markets surged, Brent hit $110/barrel & Gold hit $1950/ounce. More Western companies (Apple, Ford & Boeing,) pull investments from Russia & US banned Russian airlines from its airspace. However, Russian Oil, Gas & Uranium exports all remain open. Asian markets moved lower (Nikkei -1.3%). Biden SOU speech warns “we are coming fro your ill-gotten gains” and off-script says that Putin “has no idea what’s coming”
Overnight – AUD GDP missed (3.4% vs 3.5%), JPY Capital Spending was higher and UK House Price Inflation jumped to 1.7% form 0.6%.
- USD (USDIndex 97.60). Rallied through 97.00 most of yesterday. 97.75 next resistance.
- US Yields 10-yr lower again closed at 1.73, 3 ticks lower to 1.707% now.
- Equities – USA500 -67pts (-1.55%) 4306. US500 FUTS down at 4288 now.
- USOil – Rallied from support at $94.00, yesterday, up to $107.55 now.
- Gold – Rallied from $1905 now, trades at $1948.
- Bitcoin rallied over key 40 & 42K levels to trade at $43,800.
- FX markets – EURUSD back under 1.1100, USDJPY holds 115.15 and Cable down to 1.3280 now.
European Open – The March 10-year Bund future is up 36 ticks at 170.66, while U.S. futures are slightly lower. , although in cash markets the U.S. 10-year rate is down -2.0 bp at 1.707%. Investors are pricing out excessive rate hike bets and in the Eurozone the 10-year Bund yield closed at -0.80% yesterday, with negative rates not expected to go away any time soon. For today, investors are likely to remain extremely nervous, although the -0.7% decline in the DAX future looks modest compared to yesterday’s correction and the FTSE 100 future is actually up 0.1%.
Today – German Unemployment, EZ CPI, US ADP, BoC Policy Announcement, OPEC+, Ukraine-Russia Meeting (Time TBC), Speeches from Fed’s Powell, Bullard & Evans, ECB’s Lane, Schnabel, de Guindos & Nagel.
Biggest FX Mover @ (07:30 GMT) GBPCAD (-0.36%) 6-day collapse from 1.7345 continues down to 1.6915 now. MAs aligned lower, MACD signal line & histogram below 0 line, RSI 30 & falling, OB zone, H1 ATR 0.139, Daily ATR 0.9450.
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Stuart Cowell
Head Market Analyst
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