Morning wrap (04.03.2022)

9:40 am 4 March 2022

  • Wall Street indices moved lower yesterday. S&P 500 dropped 0.53%, Dow Jones moved 0.29% lower and Nasdaq declined 1.56%. Russell 2000 dropped 1.29%

  • Stocks in Asia also moved lower following the risk-off session on Wall Street and in Europe. Nikkei dropped 2.2%, S&P/ASX 200 moved almost 0.6% lower and Kospi declined 1.1%. Indices from China traded 0.9-2.5% lower

  • DAX futures trade near slightly above 14,400 pts mark - over 250 points below yesterday's cash close

  • Risk trades dropped overnight and safe havens gained after Russian forces attack Zaphorozia power plant, the largest nuclear power plant in Europe

  • Ukrainian firefighters managed to get the fire at Zaphorozia Nuclear Power Plant under control following overnight Russian attacks. Zelensky called on international community to act in the wake of nuclear terrorism. Power plant was captured by Russian forces

  • Unprecedented attack on a nuclear power plant has been condemned by Western countries. United Kingdom called to hold emergency UN Security Council meeting on the matter

  • US and Ukrainian nuclear agency said that nuclear reactors were not damage and therefore last night's attacks did not result in a risk of Chernobyl-like disaster

  • According to Fox News, Russia called up additional troops from western part of the country. News agency says they are expected to arrive in Ukraine within a week

  • According to UK times, Ukrainian President Zelensky survived at least 3 assassination attempts in recent days

  • S&P cut Russia's rating from BB+ to CCC-. Agency said that sanctions have made large part of reserves inaccessible and it will impact central bank's ability to act as lender of last resort

  • Moscow Stock Exchange will be closed today for the fifth consecutive day

  • The Japanese unemployment rate ticked higher in January, from 2.7 to 2.8% (exp. 2.7%)

  • Oil trades a touch higher, following yesterday's drop. Brent trades slightly below $111 while WTI tests $108.50 area

  • Precious metals trade mixed - platinum and palladium gain, silver drops and gold trades flat

  • Cryptocurrencies are trading slightly lower

  • AUD and NZD are the best performing major currencies while EUR and CAD lag the most

Risk trades took a hit on the news of fire at Europe's largest nuclear power plant. However, impacted FX pairs have recovered after the first was contained and equity indices recovered part of the drop as well. Taking a look at AUDJPY, we can see that the pair often considered a "risk barometer" is breaking above the resistance zone and approaching the 85.00 handle. Source: xStation5

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