Market Update – February 22 – RISK OFF – Stocks Dive, Treasuries Up, Oil Leaps

Stocks have collapsed & Treasuries rally and a major rally in Oil and Gold as President Putin recognizes the breakaway regions of Ukraine and orders troops into the country. The West prepares more sanctions, with USD and JPY bid. NZD also holds Fridays bid ahead of RBNZ Gold rallied to test $1914, Oil rallied up 3.4%. Yields fell to 1.858 from 1.91 from Friday’s close. Asian markets sank . (Nikkei -1.7%, Hang Seng worst performer -3.2%).  VIX futures trade -5.7%, EuroStoxx Futs. -3.44%.

USD (USDIndex 96.11) on USD bid next resistance 96.30 from 14/2.
US Yields 10-yr tanked from 1.932 close on Friday to 1.91% now to test 1.90.
Equities – USA500 -32 pts (-0.72%) 4348 – on Friday. US500 FUTS collapsed (-2.0%) to 4230,  earlier, back to 4285 now.  
USOil – Topped at $94.00, back to under $92.00 now and trades at $91.72 now. 
Gold – Holds over psychological $1900  now back to $1908     
Bitcoin broke lower to trade at $36,800. 
FX marketsEURUSD ounder 1.1300, USDJPY holds below 115.00 to 114.50 earlier and 114.75 now.  Cable breaches under 1.3600 and trades at   1.3590.  

Overnight –  JPY CPI data (0.8% vs 1.1% & 0.5% previously), But all focus was centred on geopolitics.

European Open – The March 10-year Bund future is up 49 ticks, U.S. futures are outperforming as investors head for safety, while keeping a close eye on the developing situation in east Ukraine. The standoff between the West and Russia will keep pressure on stock markets, which already sold off yesterday and are set to correct even more today. DAX and FTSE 100 futures are currently down -1.1% and 0.7% respectively.

Today – German Ifo, US Flash PMIs, Speeches from Fed’s Bostic and BoE’s Ramsden,  Earnings HSBC (beta) Home Depot.

Biggest FX Mover @ (07:30 GMT) NZDCHF (+0.27%) Rallied from lows of  0.6120  earlier, popped to 0.6155 nand trades at 0.6140 now. MAs now aligned lower, MACD signal line & histogram significantly below 0 line, RSI 43.25 & falling, OB zone H1 ATR 0.00010 Daily ATR 0.0048.

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Stuart Cowell

Head Market Analyst

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