Markets Today – Ukraine, PMI, Oil, Gold, Bitcoin

Stock markets in Europe are mixed, while US futures are lower on Thursday, as uncertainty remains around Russia’s intentions in Ukraine.

It was a rather strange week that started with warnings of an imminent invasion – repeatedly denied by Russia – followed by allegations of troop withdrawals after the completion of planned exercises which have since been rejected by Ukraine. and NATO, who instead insisted that the numbers were increasing. , not fall. It’s no wonder investors don’t know where to turn.

Clearly, tensions will persist until we see a confirmed and substantial reduction in troops on the border, but rather than abandoning the risk as they did late last week and early , investors seem comfortable staying on the fence. Of course, that could change if we see an escalation or as we head into the weekend if we don’t have clarity.

The West remains convinced that an invasion remains very likely and that flare-ups in eastern Ukraine between Russian-backed separatists and Ukrainian forces could be used to justify crossing the border. Whether the intelligence is trustworthy or hysterical, as Russia has called it, will soon become clear, but in the meantime efforts for a diplomatic solution continue, which will keep investors on edge.

Fed minutes offer little information on March rise

Inflation remains the top concern for investors as they navigate an unparalleled tightening environment. The pandemic led to widespread price pressures that lasted longer and far exceeded expectations. Central banks have been forced to act as markets continue to price in more bullish moves this year.

Wednesday’s Fed minutes offered little new information on this front and anything in them that looks potentially less hawkish is likely out of date by now. The central bank will launch its tightening cycle next month and a number of back-to-back hikes are likely to follow. Whether they’ll kick things off with a 50bp hike is unclear yet and that will depend on the data in the coming weeks, but there doesn’t seem to be consensus on that yet, despite market pricing. who have a good chance. event.

Read stable as CBRT leaves rates unchanged

The lira continues to trade in a relatively narrow range after the CBRT left the repo rate unchanged at 14% for the second meeting in a row. A series of rate cuts late last year sent the currency crashing and inflation soaring – hitting 48.7% in January – as President Erdogan imposed his unconventional beliefs on the central bank supposedly independent. The currency’s stability came as the central bank halted its easing cycle while it conducted a comprehensive review of its policy framework. Regardless of the outcome of the review, no one knows how the central bank performed under the “steerage” of Governor Şahap Kavcıoğlu.

Oil slides as US and Iran close to nuclear deal

There is no shortage of volatility in the oil market right now, with multiple forces combining to create very dynamic conditions. The market is obviously extremely stretched which is why we are seeing big moves daily and the price could already be in triple digits were it not for the nuclear talks between the US and Iran.

And that is what is driving the declines today, with reports suggesting a deal is days away. That would be huge because it could mean around 1.3 million barrels of crude per day would quickly re-enter the market and ease some of those supply-side pressures. You can imagine the United States was highly motivated to get this deal done before the midterms later this year, given the ineffectiveness of its latest efforts to bring prices down.

Gold still has a lot of appeal

Gold continues to rally amid all the geopolitical uncertainty. Not only are the events on the Ukrainian border prompting investors to seek safe havens, but they are also providing inflation protection at a time of soaring prices and the prospect of higher oil and gas prices, should the Russia invades.

The latest move saw gold hit its highest level since mid-June and there still seems to be momentum in the move so we can see $1,900 being tested. This is the next big test for the yellow metal and a big escalation in Ukraine could be the catalyst for such a move.

Bitcoin in Trouble at Key Resistance

Bitcoin is down nearly 2% on Thursday, appearing to lose some momentum as it approaches $45,500, a major resistance barrier. He has shown real resilience in recent weeks but is struggling to generate the momentum needed to take the next step. Market uncertainty probably isn’t helping, although it hasn’t dampened it recently. A break above here could be a very bullish development for bitcoin.

About Mike Stevenson

Check Also

The time to recheck your risk profile matches your tolerance for market downside

Investors may not have fully appreciated the level of risk they were carrying in their …