Spreadex Market Update
Volatility Around Poland Missile Strike Fades – US Retail Sales Due Today
Reports yesterday of a Russian missile hitting Poland, killing 2 people 5 miles over the NATO border, sparked a wave of uncertainty which tempered the risk rally somewhat. On the back of the heaviest Russian missile bombardment of Ukraine since the conflict began, fears of a NATO response to the event saw equities and commodities stalling while safe havens began gaining.
However, subsequent news flow has seen US intelligence claiming that the missile strike actually came from Ukrainian military attempting to shoot down a Russian rocket. Risk markets have subsequently bounced back with the US Dollar turning lower once again given that the need for (or risk of ) any NATO response has been quashed.
Key Factors for Today
- USD turns lower again on weak PPI reading – retail sales next
- Equities rebound on US intelligence claims that Poland strike not from Russia
- UK inflation hits 11.1% last month – 41-yr highs
- Risk FX rallying, safe-havens weaker
- Metals and oil stall
Coming Up
- CAD – Canadian CPI
- EUR – ECB Financial stability report
- USD – US Retail Sales
Equities Rebound Following Yesterday’s Volatility
Equities markets continue to push higher this week. Despite volatility around yesterday’s Russia-Ukraine news flow, a weaker-than-forecast US PPI is keeping December FOMC expectations skewed lower, which is helping risk markets here. With the G20 meetings underway, there is plenty of news flow to keep an eye on though, here and now it seems that USD remains the key driver for equities. The focus today will be on US retail sales which, if lower-than-forecast last month, should see USD trading lower, allowing equities further room to rally.
UK Inflation Hits 41-yr Highs
In FX, GBP is coming under pressure today (away from USD) on the back of the latest inflation data which showed UK CPI hit 41-year highs of 11.1% last month, well above the 10.7% forecast. This marks a full 1% jump on the prior month and is further driving growth concerns for the UK.
Risk FX Rallying, Safe-Havens Falling
Broadly speaking, with the US Dollar back under pressure again today, the near-term outlook is positive for risk currencies while safe-havens are finding reduced demand as risk sentiment improves. AUD and EUR are the two best performers so far on Wednesday.
Later today, we’ll get the latest Canadian CPI report along with US retail sales. We also have the ECB financial stability report, and Lagarde due to speak, along with the BOE monetary policy report hearings.
Metals & Oil Lose Momentum Waiting on USD
In the metals and commodities space, both gold and silver are seeing better demand across the European open on Wednesday. While both metals are still firmly higher on the back of last week’s gains, we’re yet to see follow through though a weak US retail sales reading today might well prove to be the catalyst. Crude oil is also lacking momentum this week. We’ve seen decent two-way flow but nothing decisive yet. Today’s EIA report might change
that if we see any surprises.
It's easy to open an account
- Fill in our simple online application form
- Fund your account
- Start trading the global markets instantly!
SEARCH FOR AN ARTICLE:
Enter a keyword and search for all relevant articlesMARKET ANALYSIS
RECENT POSTS
DISCLAIMER
Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 64% of retail investors lose money when trading spread bets and CFDs with this provider. You should consider whether you understand how spread bets and CFDs work and whether you can afford to take the high risk of losing your money. For professional clients, spread betting and CFD trading can also result in losses larger than your initial stake or deposit.
Spreadex Ltd is authorised and regulated by the Financial Conduct Authority, provides an execution only service and does not provide advice in any way. Nothing within this update should be deemed to constitute the provision of investment advice, recommendations, any other professional advice in any way, or a record of our trading prices. This update does not constitute or form part of an offer of, or solicitation for a transaction in any financial instrument, nor shall it or the fact of its distribution form the basis of, or be relied on in connection with, any contract therefore. Any persons placing trades based on their interpretation of the comments or information within this update does so entirely at their own risk.
No representation, warranty, or undertaking, express or limited, is given as to the accuracy or completeness of the information or opinions contained within this update by Spreadex Ltd or any of its employees and no liability is accepted by such persons for the accuracy or completeness of any such information or opinions. As such, no reliance may be placed for any purpose on the information and opinions contained within this update.
The information contained within this update is the intellectual property of Spreadex Ltd and is protected by UK and International copyright laws. All rights reserved. Users may however freely download, distribute and reproduce extracts of the contents, subject always to accrediting Spreadex Ltd as the source and providing a hyperlink to www.spreadex.com.
