Market sentiment impressively recovered this past week despite Russian President Vladimir Putin attacking Ukraine. On Wall Street, Dow Jones, S&P 500 and Nasdaq 100 futures performed about -0.1%, +0.8% and +1.3% respectively. At one point, the latter was setting course for the worst month since November 2008. Equities were still in the red throughout Europe and Asia.
By Friday, severe sanctions against Russia, such as curtailing energy and locking it out of SWIFT, were not implemented. European leaders were discussing the latter and the US was on course to sanction Vladimir Putin and Russian Foreign Minister Sergei Lavrov. The Kremlin was also calling on talks with Kyiv, though the latter showed no intentions of taking them.
Judging the market reaction, it seems that a relatively ‘worse’ scenario for sanctions was avoided as the price of crude oil aimed lower. Gold prices also retreated. The Euro, which is vulnerable from a proximity standpoint and ECB policy considerations, rose on Friday. Still, the situation has been developing quickly and continues to remain a volatile sticking point for markets.
Outside of Ukraine, the week ahead contains a plethora of items for traders to keep an eye on. The RBA and BoC rate decisions are around the corner. Expectations for a more hawkish shift are growing for the former while a rate hike is expected from the latter. As such, the Australian and Canadian Dollars could see some volatility.
A slew of Fedspeak is also ahead. Chair Jerome Powell will be testifying before Congress, where he may be grilled on inflation that is running at a 40-year high. St. Louis and Chicago branch presidents James Bullard and Charles Evans are also speaking, respectively. The week will also wrap up with NFPs. What else is in store ahead?
US DOLLAR WEEKLY PERFORMANCE AGAINST CURRENCIES AND GOLD
Fundamental Forecasts:
Crude Oil Prices Scratch $100 as Ukraine Crisis Deepens Supply Concerns
Crude oil prices extended higher after Russia launched an attack on Ukraine, raising concerns about supply constraints in an already tight market. Iran nuclear talks and US release of strategic reserves are also in focus.
Euro Forecast: Tough Times Ahead for ECB as Stagflation Talk Creeps In
The Euro continues to remain under pressure as the Russian invasion escalates. EUR/USD is likely to move lower while the ECB has some hard decisions to make.
Bitcoin (BTC/USD) Continues to Rally, Riding a Wave of Renewed Risk Appetite
Bitcoin has recovered most of this week’s losses over the last 24 hours as markets take a more positive view of risk assets.
Pound Sterling (GBP) Forecast: Reflecting on Volatile End to the Week
The Pound, like other risk-related assets, experienced an almost immediate bounce back after a heavy sell-off on Thursday and the prospect of talks could buoy GBP further
Canadian Dollar Forecast: Geopolitics & Bank of Canada to Set the Tone for USD/CAD
USD/CAD could move lower in the coming days if market sentiment around the Russia-Ukraine crisis improves, and Bank of Canada delivers a hawkish interest rate hike at its March meeting.
S&P 500 Forecast for the Week Ahead
Remarkable reversal sees the S&P 500 post minor gains for the week. Geopolitics remains the key driver
US Dollar Forecast: USD Rally to Persist on Upbeat US NFP Report
Fresh data prints coming out of the US may keep the Dollar afloat as the Non-Farm Payrolls (NFP) report is anticipated to show a further improvement in the labor market.
Australian Dollar Week Ahead: Tough Road Awaits Amid Ukraine, RBA and NFPs
The Australian Dollar has numerous obstacles to face if it wishes to extend gains in the week ahead. These include Ukraine tensions, the RBA rate decision and US NFPs.
Technical Forecasts:
S&P 500, Nasdaq 100, Dow Jones Forecast: Post-panic Rally in Play
Last week stocks hit a flash point on the Russian invasion; technical and sentiment outlook is bullish in the days ahead.
Gold Technical Forecast: Gold Break Rejected- XAU/USD Bulls on Notice
Gold prices ripped higher amid a barrage of war headlines with the XAU/USD breakout reversing sharply off uptrend resistance- Is a near-term high in place?
Crude Oil Technical Forecast: Retail Remains Bullish after Resistance Tag at 100
WTI crude oil tested the 100 level for the first time since the last time Russian invaded Ukraine in 2014. This time produced a different result.
