- European stocks fell sharply
- Wall Street under pressure
- US crude stocks rose unexpectedly
- FOMC minutes highlight the appetite for 0.50% rate hikes
European indices plunged on Wednesday as investors anticipated the extent of new European sanctions on Russia while weighing on hawkish stances from the Federal Reserve. However due to technological challenges, EU diplomats were unable to ratify a Russian coal ban and a new package of Russia sanctions. Meanwhile, the UK banned export of key oil refining equipment to Russia next week and plans to end all imports of coal and oil from Putin’s regime by the end of 2022. Britain also urged G7 and NATO countries to agree to a timetable to phase out oil and gas imports from Russia. Dax finished 1.89% lower, CAC 40 lost 2.21% and FTSE 100 dropped 0.34%.
US indices fell sharply during today's session following another set of hawkish comments from Fed officials and as investors await details of fresh international sanctions against Russia. Yesterday Fed Governor Lael Brainard said that the central bank needs to shrink its balance sheet “rapidly” to drive down inflation and today Philadelphia Fed President Patrick Harker and San Francisco Fed President Mary Daly spoke in similar manor. Fed meeting minutes failed to trigger major moves on the market. Publication showed that many participants preferred a 50 bps hike, instead of a 25bps hike. On the balance sheet reduction, officials agreed that monthly caps of about $60 billion for Treasury securities and $35 billion for mortgage-backed securities would likely be appropriate, with the amounts phased in over a period of three months or modestly longer.
Start investing today or test a free demo
Create account Try a demo Download mobile app Download mobile appMixed moods prevail today in commodity markets amid stronger dollar and higher treasury yields. US 10-year Treasury jumped to 2.61% and the gap between 2 and 10-year bond yields widened further. Meanwhile gold continues to trade around $1920 and silver rose slightly to $24.35. WTI price plunged more than 5.50% below $97.00 per barrel while Brent is testing $101.00 level. US crude oil inventories rose by 2.421 million barrels to 412.4 million barrels, after a 3.449 million barrel drop and compared with market expectations for a 2.056 million fall, data from the EIA Petroleum Status Report showed. Major cryptocurrencies move sharply lower. Bitcoin fell over 5% and trades below $45 000 while Ethereum pulled back to $3200 level.
OIL price broke below the support at $ 103.40 and if current sentiment prevails downward move may accelerate towards the next support zone at $97.70. Source: xStation5
The content of this report has been created by XTB S.A., with its registered office in Warsaw, at Prosta 67, 00-838 Warsaw, Poland, (KRS number 0000217580) and supervised by Polish Supervision Authority ( No. DDM-M-4021-57-1/2005). This material is a marketing communication within the meaning of Art. 24 (3) of Directive 2014/65/EU of the European Parliament and of the Council of 15 May 2014 on markets in financial instruments and amending Directive 2002/92/EC and Directive 2011/61/EU (MiFID II). Marketing communication is not an investment recommendation or information recommending or suggesting an investment strategy within the meaning of Regulation (EU) No 596/2014 of the European Parliament and of the Council of 16 April 2014 on market abuse (market abuse regulation) and repealing Directive 2003/6/EC of the European Parliament and of the Council and Commission Directives 2003/124/EC, 2003/125/EC and 2004/72/EC and Commission Delegated Regulation (EU) 2016/958 of 9 March 2016 supplementing Regulation (EU) No 596/2014 of the European Parliament and of the Council with regard to regulatory technical standards for the technical arrangements for objective presentation of investment recommendations or other information recommending or suggesting an investment strategy and for disclosure of particular interests or indications of conflicts of interest or any other advice, including in the area of investment advisory, within the meaning of the Trading in Financial Instruments Act of 29 July 2005 (i.e. Journal of Laws 2019, item 875, as amended). The marketing communication is prepared with the highest diligence, objectivity, presents the facts known to the author on the date of preparation and is devoid of any evaluation elements. The marketing communication is prepared without considering the client’s needs, his individual financial situation and does not present any investment strategy in any way. The marketing communication does not constitute an offer of sale, offering, subscription, invitation to purchase, advertisement or promotion of any financial instruments. XTB S.A. is not liable for any client’s actions or omissions, in particular for the acquisition or disposal of financial instruments, undertaken on the basis of the information contained in this marketing communication. In the event that the marketing communication contains any information about any results regarding the financial instruments indicated therein, these do not constitute any guarantee or forecast regarding the future results.
