What you need to know on Tuesday, February 15:
Tensions between Russia and Ukraine dominated financial markets on Monday, leading to some solid safe-haven demand. The catalyst was a statement from US President Joe Biden, who told his Ukrainian counterpart Volodymyr Zelensky on Sunday that the US would respond "swiftly and decisively" if Russia takes further steps toward invasion.
Early on Monday, Russian Foreign Minister Sergey Lavrov told President Putin that the US had put forward concrete proposals on reducing military risks and that he could see a way to move forward with talks, although he added that EU and NATO responses have not been satisfactory. Fears partially eased, although risk-off continues.
As the day comes to an end, there are no signs of progress in diplomatic talks, but on the contrary, the Ukrainian President Zelensky reported that he has suspects Russia will likely attack the country on Wednesday, February 16, declaring it a national holiday, the Day of Unity.
The American dollar and gold were the most benefited in a risk-averse environment, with the first further boosted by comments from US St Louis Fed President James Bullard, who reiterated his call for 100bps in interest rate hikes by July 1, citing the last four inflation reports which show broadening inflationary pressures.
A scarce macroeconomic calendar exacerbated risk-related trading, with not much in the docket until next Wednesday, when the US will publish Retail Sales and the FOMC Meeting Minutes.
The EUR/USD pair trades sub-1.1300, while GBP/USD hovers around 1.3520. Commodity-linked currencies are little changed vs the greenback amid soaring gold and oil prices.
Global indexes plunged, with Wall Street accelerating its decline ahead of the close. Government bond yields retreated, with that on the 10-year Treasury note now at around 1.96%.
Gold surged to a fresh 2022 high of $1,872.85 a troy ounce, holding nearby at the time being. Crude oil prices also soared, with WTI trading at $95.25 a barrel.
Shiba Inu struggles to hold support, SHIBA could retest prior range near $0.000020
Like this article? Help us with some feedback by answering this survey:
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
EUR/USD treads water just above 1.0400 post-US data
Another sign of the good health of the US economy came in response to firm flash US Manufacturing and Services PMIs, which in turn reinforced further the already strong performance of the US Dollar, relegating EUR/USD to the 1.0400 neighbourhood on Friday.
GBP/USD remains depressed near 1.2520 on stronger Dollar
Poor results from the UK docket kept the British pound on the back foot on Thursday, hovering around the low-1.2500s in a context of generalized weakness in the risk-linked galaxy vs. another outstanding day in the Greenback.
Gold keeps the bid bias unchanged near $2,700
Persistent safe haven demand continues to prop up the march north in Gold prices so far on Friday, hitting new two-week tops past the key $2,700 mark per troy ounce despite extra strength in the Greenback and mixed US yields.
Geopolitics back on the radar
Rising tensions between Russia and Ukraine caused renewed unease in the markets this week. Putin signed an amendment to Russian nuclear doctrine, which allows Russia to use nuclear weapons for retaliating against strikes carried out with conventional weapons.
Eurozone PMI sounds the alarm about growth once more
The composite PMI dropped from 50 to 48.1, once more stressing growth concerns for the eurozone. Hard data has actually come in better than expected recently – so ahead of the December meeting, the ECB has to figure out whether this is the PMI crying wolf or whether it should take this signal seriously. We think it’s the latter.
Best Forex Brokers with Low Spreads
VERIFIED Low spreads are crucial for reducing trading costs. Explore top Forex brokers offering competitive spreads and high leverage. Compare options for EUR/USD, GBP/USD, USD/JPY, and Gold.