Market Update – March 1 – Calmer Markets for now

Risk Off mood cools, at least for now, with stock markets mixed, the USD, Commodities and Treasuries hold their bid. More Western companies pull investments from Russia, Visa & Mastercard block financial transactions, Monaco and London block more accounts. Oil futures rally again, Gold holds up and Yields remain pressured. Overnight Asian markets move  JPY Manu. PMI miss, CNY PMI’s beat (51.6 vs 50.6). RBA keeps interest rates unchanged amid new uncertainty. Ukraine applies for EU membership as a 65km convoy of Russian armour heads towards Kyiv.

February Review – The S&P500 fell -3.1%, DJIA30 lost -3.5%, & the NASDAQ shed -3.4%.  Year to date the S&P500 is down -8.2% with january & February being the biggest two-month drop since march 2020 and the onset of the pandemic.

USD (USDIndex 96.65). Traded below 97.00 most of yesterday. 96.50 next support. 
US Yields 10-yr lower again closed at 1.839 Monday, ticks up 3 ticks to 1.86% now. 
Equities – USA500 -10.70pts (-0.24%) 4373.  (TSLA +7.48%, Zoom +5.81%, BP -4.95%, Total -7.62%)  US500 FUTS recovering to 4386 now.  
USOil – Support at $93.00, yesterday and back to  $95.00 now.  
Gold – Holds over psychological $1900 now, and trades at $1908.     
Bitcoin rallied over key 40 & 42K levels to trade at $43,400. 
FX marketsEURUSD back to 1.1225, from 1.1125 lows yesterday, USDJPY holds 115.00 and Cable recovers 1.3400 to trade at 1.3420 now.    

European Open – The March 10-year Bund future is up 37 ticks at 167.41, outperforming versus Treasuries, which are down on the day. Europe’s geographical proximity to the Ukraine and the reliance on Russian oil and gas has left European markets more vulnerable to the fallout from the Ukraine war with DAX and FTSE 100 futures down -0.4%. Developments in Ukraine will continue to overshadow the markets going forward.

Today – EU, UK & US Final PMIs, German CPI & Retail Sales, US ISM Manufacturing PMI & Construction Spending, Speeches from Fed’s Bostic & Mester, ECB’s Lagarde, BoE’s Saunders & President Biden’s State of the Union Address. Earnings Target, AMC, HP & Salesforce.

Biggest FX Mover @ (07:30 GMT) AUDJPY (+0.33%) The cooling of the risk off mood and RBA helps the pair recover. A breach of 83.00 lower earlier to 83.75 now.  MAs  aligned higher, MACD signal line & histogram above 0 line, RSI 65.80 & rising, OB zone, H1 ATR 0.139, Daily ATR 0.9450.

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Stuart Cowell

Head Market Analyst

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