- European indices erased early gains and finished today's session lower, halting a 3-day gain ahead of tomorrow's highly expected ECB meeting, during which investors expect the first interest rate hike since 2011. DAX fell 0.20% and CAC40 retreated 0.27%.
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There is much speculation about a larger rate hike by the ECB, which could reach even 50 bp. However, the ECB would have to present a market fragmentation tool, otherwise yields in countries such as Italy and Greece would increase sharply. However, according to unconfirmed reports, this tool is not ready yet, so there is a chance that the ECB will disappoint hawks again.
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Mods in Europe worsened after the comments from Russian foreign minister Lavrov, who said that goals of the "special military operation in Ukraine" have changed and Russia is no longer focused only on the so-called Luhansk and Donetsk People's Republics.
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Meanwhile, the EU may propose rationing natural gas usage by 15%, should Russia keep supplies insufficiently low when the Nord Stream 1 finishes seasonal works on Thursday. The IMF said the EU economy could shrink as much as 2.65% if there was a Russian gas embargo.
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In Italy the co-ruling Forza Italia and League parties will both not take part in a confidence vote called by Prime Minister Mario Draghi in the upper house which may lead to new elections.
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Mixed moods prevail on Wall Street. S&P 500 is trading higher, Dow Jones fell below the flatline, while Nasdaq is adding over 1% as investors digested another slew of earnings reports.
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Netflix stock surged after the streaming giant lost fewer subscribers than anticipated, while Baker Hughes shares tumbled over 10% after the company reported a quarterly loss amid Russia-related charges and soaring inflation. Tesla and United Airlines are also due to report results today.
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Weekly US crude oil inventories fell by 0.446 mb, following an injection of 3.254 million barrels in the previous period, and contrasting with market expectations for a 1.357 mb build. Gasoline inventories increased by 3.498 mb, beating forecasts of a 0.071 mb.Initially WTI oil moved south, however buyers regained control and price jumped above $100.00 per barrel.
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Currently NZD and USD are the best performing major currencies while CHF and EUR lag the most.
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Volatility remains low in the precious metals market, with gold trading just below $ 1706 an ounce, while silver erased early gains and pulled back to $18.70 level.
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Cryptocurrencies relief rally lost momentum during today's session. Bitcoin trades around the flatline at $23,600, while Ethereum pulled back slightly to $1550.
The dollar index (USDIDX) has been moving in a strong uptrend in recent months. However sellers became more active this week and launched a downward correction. If current sentiment prevails, the downward move may accelerate towards key support at 105.30 , which is marked with previous price reactions and the lower limit of the 1:1 structure. Source: xStation5
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