DAILY MARKET ANALYSIS 11.03.2022
Global risk sentiment remains mostly
clouded amid the economic consequences of war in Ukraine. Developments
surrounding Ukraine keep setting the tone for equity markets, currencies, oil
prices, and even cryptocurrencies.
risk trades bounced ahead of the North American trading
session on Friday. Russian President
Vladimir Putin said that there was a positive shift in talks with Ukraine
despite reports of talks breaking down on Friday.
stocks are seen opening higher Friday, ending a volatile week on a
positive note on the back of raised hopes of a diplomatic solution to the
war in Ukraine. NASDAQ Nasdaq jumping 1.5%.
Asia, Nikkei closed down -2.05% shedding some of its nearly 4% gain on
Thursday, the Bank of Japan will also hand down its policy decision in the
Kong’s Hang Seng index, which earlier fell more than 3%, partially
recovered but still closed 1.61% lower at 20,553.79 as Chinese tech stocks
listed in the city declined
equity markets extended gains while US stock index futures turned positive
in recent trading
U.S. dollar index, which tracks the greenback against a basket of its
peers, (DXY) rose after the release as prices completed the intra-day
recovery from the sharp drop around the time Putin announced there were
positive shifts during recent talks.
maintaining this week’s recovery, recovered toward 1.1050 during the
European trading hours on Friday,
A perceivably dovish ECB
yesterday post rate announcement hushed Euro bulls after gains earlier
this week. The European Central Bank kept its interest rate steady at 0%
as it handed down its own policy decision on Thursday.
lost its traction and dropped below 1.3100 during the American trading
hours on Friday. The broad-based dollar strength on rising yields
continues to weigh on the pair ahead of the weekend.
spikes to fresh multi-year high, eyeing to reclaim 117.00 mark, Signs
of stability in the equity markets dented demand for the safe-haven JPY.
Thursday’s strong US CPI print underpinned the USD and remained
The AUD/USD is
set to end the week on a lower note, despite increased risk appetite on
earlier news that Russian President Vladimir Putin claimed that the
discussions with Ukraine had taken a positive turn.
yield on 10-year Treasury yields rose after the U.S. report, which
also showed the sharpest increase in 40 years. The
benchmark 10-year Treasury yield broke above the key 2% level, a sharp
move from its weekly lows of 1.67% as investors anticipate a looming
policy tightening cycle. Investors widely expect that the U.S. Federal
Reserve will hike interest rates when it hands down its policy decision on
10-year yield Bond surged to an over 3-week high of 0.27%, clawing
back all losses from a sell-off due to the war in Ukraine, after a
surprisingly hawkish ECB monetary policy decision. The
ECB anticipated plans to end asset purchases in the third quarter, as
price pressures outweighed risks steaming from the Ukraine conflict.
Meanwhile, market participants await European Union leaders to unveil the
bloc's policy response to Russia's invasion of Ukraine.
10-year yield rose toward 1.5%, the highest in near three weeks, as
investors weighed stagflation concerns and rate hike prospects. The
UK announced new sanctions against Russia, namely a ban on all Russian
aircraft from overflying the country and seizing any plane in the UK,
after committing to phase out oil purchases from Russia by 2022.
positive shift witnessed in risk sentiment on renewed optimism for a
de-escalation of the Russia-Ukraine conflict is weighing on gold on
Friday. XAU/USD is trading below $1,990 heading into the weekend
the past few days, crude oil price saw a major increase above $100.00 against
the US Dollar. Crude oil futures dropping 2.10% on Thursday but up
slightly in this morning in premarket action. In fact, most oil-related
commodities traded lower, including Brent crude, West Texas crude, RBOB
gasoline and heating oil. Other commodities where Russia is a big player
have also fallen.
Up Ahead - Next week, the Fed meeting will be the key focus
for financial markets.
Inflation continues to rise, and the Federal Reserve is expected to start taking action to combat it with a quarter-point rate hike next week.
February’s CPI was a hot 7.9%. In March, consumer inflation could be close to 9% or more, one economist said.
Rising oil prices have created an even bigger inflation problem for the Fed, and they ultimately could be a big factor in determining the fate of the economy and interest rates.
The Federal Reserve’s March meeting represents a critical turning point for monetary policy: Officials are all but certainly going to raise interest rates for the first time since 2018, marking an end to the U.S. central bank’s extraordinary coronavirus crisis-era stimulus.
After March, how many more times will the Fed hike rates — and by how much?