21 Feb

Biden unexpectedly visited Kyiv. Iran continues to build up uranium reserves

February 21, 2023

By JustMarkets

The US stock market did not trade yesterday because of the holiday. Stock index futures traded in the European session, but there were no significant movements. The price traded in a narrow price range due to low volatility.

Meta Platforms (META), the parent company of Facebook and Instagram, said over the weekend that it was launching a paid subscription service that would offer features such as account verification, a move the company said would protect content generators.

Stock markets in Europe were mostly down yesterday. Germany’s DAX (DE30) decreased by 0.03%, France’s CAC 40 (FR40) lost 0.16%, Spain’s IBEX 35 (ES35) fell by 0.55%, and the British FTSE 100 (UK100) closed up by 0.12%.

Consumer sentiment in the Eurozone rose to its highest level in a year, a sign of resilience and growing hope that the region can avoid a recession this year.

The Swiss National Bank remains ready to be active in the foreign exchange markets to achieve its goal of price stability. This means that if the Swiss franc depreciates, the SNB will sell foreign currency. If the Swiss franc strengthens rapidly, the SNB will buy foreign currency in the right amount. This is necessary to keep the inflation rate. The rise in the value of the Swiss franc has helped reduce inflation caused by more expensive imports, while Switzerland’s hydroelectric power and nuclear power have helped reduce the impact of soaring energy prices.

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US President Joe Biden made a surprise visit to Ukraine’s capital, Kyiv, on Monday, on the eve of the anniversary of Russia’s invasion of Ukraine. Biden said his visit should “reaffirm Ukraine’s unwavering commitment to democracy, sovereignty, and territorial integrity.” Over the weekend, US Secretary of State Antony Blinken said that China was considering providing Russia with military assistance and warned that any such action would “create a serious problem for us and in our relationship.” While Biden was in Kyiv, the State Department announced $460 million in additional US aid to Ukraine, including artillery ammunition, anti-tank systems, air defense radars, and $10 million for energy infrastructure. European Union High Representative for Foreign Affairs Josep Borrell said the bloc would approve additional sanctions before the anniversary of the conflict.

Crude oil prices rose yesterday after reports of delays in lifting US sanctions against Iran. The UN observers found a build-up of uranium enrichment that is only 6% below the level needed to make a nuclear bomb and well above the level needed to make fuel for reactors. This will complicate any attempt to lift US sanctions on Iranian oil exports. Saudi Energy Minister Prince Abdulaziz revealed yesterday that the OPEC+ group of oil exporters remains flexible on its production policy, despite last week’s announcement that existing production quotas would be frozen until the end of the year.

Gold prices recovered some of their losses late last week. But the fundamentals are still on the side of the bears. Much of gold’s decline was driven by US factors, particularly the Federal Reserve’s more aggressive behavior after stronger-than-expected economic data on the labor market and PPI inflation.

Asian markets were mostly up yesterday. Japan’s Nikkei 225 (JP225) gained 0.07%, China’s FTSE China A50 (CHA50) jumped by 2.31% yesterday, Hong Kong’s Hang Seng (HK50) ended the day up by 0.81%, India’s NIFTY 50 (IND50) decreased by 0.56%, and Australia’s S&P/ASX 200 (AU200) ended the day slightly positive by 0.06%.

New Zealand’s Central Bank is ready to cut the pace of interest rate hikes to half a percentage point Wednesday in response to signs that inflation has peaked in the wake of the devastating Cyclone Gabriel. 19 of 23 economists believe the Reserve Bank will raise the official interest rate from 4.25% to 4.75% at its Wednesday meeting.

The latest RBA meeting minutes showed that Australia’s central bank is considering further interest rate hikes of 25 or 50 basis points. Unlike the December minutes, there was no consideration of pausing the tightening cycle here. The RBA pointed to the “great breadth and resilience” of inflation and the “very large” amount of household savings to emphasize the need for higher borrowing costs.

S&P 500 (F) (US500) 4,079.09 0 (0%)

Dow Jones (US30)33,826.69 0 (0%)

DAX (DE40) 15,477.55 −4.45 (−0.03%)

FTSE 100 (UK100) 8,014.31 +9.95 (+0.12%)

USD Index 103.88 0 (0%)

Important events for today:
  • – Australia Manufacturing PMI (m/m) at 00:00 (GMT+2);
  • – Australia Services PMI (m/m) at 00:00 (GMT+2);
  • – Australia RBA Monetary Policy Meeting Minutes at 02:30 (GMT+2);
  • – Japan Manufacturing PMI (m/m) at 02:30 (GMT+2);
  • – Japan Services PMI (m/m) at 02:30 (GMT+2);
  • – French Manufacturing PMI (m/m) at 10:15 (GMT+2);
  • – French Services PMI (m/m) at 10:15 (GMT+2);
  • – German Manufacturing PMI (m/m) at 10:30 (GMT+2);
  • – German Services PMI (m/m) at 10:30 (GMT+2);
  • – Eurozone Manufacturing PMI (m/m) at 11:00 (GMT+2);
  • – Eurozone Services PMI (m/m) at 11:00 (GMT+2);
  • – UK Manufacturing PMI (m/m) at 11:30 (GMT+2);
  • – UK Services PMI (m/m) at 11:30 (GMT+2);
  • – Germany ZEW Economic Sentiment (m/m) at 12:00 (GMT+2);
  • – Canada Consumer Price Index (m/m) at 15:30 (GMT+2);
  • – Canada Retail Sales (m/m) at 15:30 (GMT+2);
  • – US Manufacturing PMI (m/m) at 16:45 (GMT+2);
  • – US Services PMI (m/m) at 16:45 (GMT+2);
  • – US Existing Home Sales (m/m) at 17:00 (GMT+2).

By JustMarkets

 

This article reflects a personal opinion and should not be interpreted as an investment advice, and/or offer, and/or a persistent request for carrying out financial transactions, and/or a guarantee, and/or a forecast of future events.


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