Ipek Ozkardeskaya
Swissquote Bank Ltd
Joint decision from the US and the UK to ban Russian oil sent another shockwave to commodity prices yesterday.
The European natural gas prices spiked to all-time highs and crude oil rallied to $130 mark.
Stock markets are highly volatile as uncertainties loom. The European indices rally again this morning, BUT the rallies are mostly driven by intra-day trades, whereas longer-term investors are leaving the market; hedge funds and the like are reportedly cutting exposure and covering shorts as visibility became very limited.
The VIX index rises steadily, as the selloff in the stocks continue. The S&P500 started the day in the positive and ended 0.72% down, while Nasdaq lost some 0.30%.
What really boosts the optimism in the European markets is partly the news that the EU countries will be issuing a massive joint bond to finance energy and defense… so the European Central Bank (ECB) could potentially buy it!
Joke aside, the extra massive cash would add to the inflationary pressures in Europe and should, in theory, force the ECB to become more aggressive on its monetary policy despite the Ukrainian threat to the economic recovery.
The ECB hawks are therefore in charge of the market and the EURUSD is trading past the 1.09 mark since yesterday.
The US dollar index consolidates a touch below the 99 mark, gold spiked to $2070 an ounce & Bitcoin rallied after US Treasury Secretary Yellen accidentally published remarks revealing Biden's impending crypto order.
This report has been prepared by Swissquote Bank Ltd and is solely been published for informational purposes and is not to be construed as a solicitation or an offer to buy or sell any currency or any other financial instrument. Views expressed in this report may be subject to change without prior notice and may differ or be contrary to opinions expressed by Swissquote Bank Ltd personnel at any given time. Swissquote Bank Ltd is under no obligation to update or keep current the information herein, the report should not be regarded by recipients as a substitute for the exercise of their own judgment.
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