17 Feb

Financial markets remain tense due to the geopolitical situation in Eastern Europe

February 17, 2022

by JustForex

The US stock markets traded without a single trend yesterday. The Dow Jones index (US30) decreased by 0.16%, the S&P 500 index (US500) added 0.09%, and the NASDAQ technology index (US100) lost 0.1% at the close of the stock market.

Yesterday, the FOMC minutes showed that most officials prefer that the committee’s net asset purchases continue to contract in line with the schedule announced in December, complete the asset purchases in March, and raise the interest rate. FOMC officials may also go for a faster rate hike, but only if the inflation rate does not fall. Several participants expressed confidence that conditions would likely require balance sheet reduction to begin later this year.

NVIDIA cut its losses to a minimum when it announced a partnership with Jaguar Land Rover to build automated driving systems.

European stock indices ended Wednesday’s trading in different directions. German DAX (DE30) decreased by 0.28%, French CAC 40 (FR40) fell by 0.21%, Spanish IBEX 35 (ES35) gained 0.22%, British FTSE 100 (UK100) was down 0.07%. The geopolitical situation in Eastern Europe has worsened again. Russia-backed rebels have accused Ukrainian forces of shelling their territory in violation of agreements to end the conflict. The confrontation in Eastern Europe is one of the deepest crises in relations between East and West in decades. Moreover, Western partners warn that Russia’s military presence near Ukraine’s borders is growing and not reducing. At the same time, Russia can “at any moment demonstrate a false pretext” to justify an invasion. The dollar index, Japanese yen, gold, and oil have already responded with growth as defensive assets.

US oil inventories increased by 1.1 million barrels over the week. With Iran negotiating a nuclear deal that could release Iranian oil to the global market, oil prices fell sharply yesterday. But this morning, oil prices jumped again as the geopolitical situation in Eastern Europe escalated again. Interruptions in the supply of the main producer with a deficit in the world market could push oil prices up to $100 a barrel.

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Asian markets are trading mixed today. Japan’s Nikkei 225 (JP225) decreased by 0.83%, Hong Kong’s Hang Seng (HK50) added 0.07%, and Australia’s S&P/ASX 200 (AU200) increased by 0.16%. Statistics showed Japan had its biggest trade deficit in eight years in January after Europe’s trade deficit widened in December due to higher energy prices. Australia’s unemployment rate remained unchanged at 4.2%.

Main market quotes:

S&P 500 (F) (US500) 4,475.01 +3.94 (+0.09%)

Dow Jones (US30) 34,934.27 −54.57 (−0.16%)

DAX (DE40) 15,370.30 −42.41 (−0.28%)

FTSE 100 (UK100) 7,603.78 −5.14 (−0.07%)

USD Index 95.80 −0.19 (−0.20%)

Important events for today:
  • – Australia Unemployment Rate (m/m) at 02:30 (GMT+2);
  • – US Building Permits (m/m) at 15:30 (GMT+2);
  • – US Initial Jobless Claims (w/w) at 15:30 (GMT+2);
  • – US Philadelphia Fed Manufacturing Index (m/m) at 15:30 (GMT+2);
  • – US Natural Gas Storage (w/w) at 17:30 (GMT+2);
  • – US FOMC Member Bullard Speaks at 18:00 (GMT+2).

by JustForex

 

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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