The Russia-Ukraine war remains a key topic in the markets. While asset prices are no longer as reactive to war news as they were two weeks ago, uncertainty remains. Sell-off on news of the attack on Europe's largest nuclear power plant in Ukraine is a perfect example of how nervous markets are. Next week markets will be focused on GOLD, EURUSD and OIL.
GOLD
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Create account Try a demo Download mobile app Download mobile appLaunch of Russian invasion of Ukraine triggered flight to safety on financial markets, benefitting assets like gold or Japanese yen. Gold price reached $1,940 per ounce last week and further price gains cannot be ruled out. While war in Ukraine is the main driver, one cannot forget about Fed's policy. The United States will release CPI data for February on Thursday, 1:30 pm GMT with the market expecting another acceleration. However, as much of this inflation is supply-side inflation, the question remains what the Fed can do to stop it.
EURUSD
Return of war to Europe had a significant impact on European assets. EURUSD plunged below 1.10 at the end of the week - the lowest level since May 2020. Freefall on the euro market is beginning to look worrisome and some started to look towards ECB for help. The European Central Bank will announce its next monetary policy decision on Thursday (12:45 pm GMT). Rates are unlikely to be changed but investors will look for hints on how the Bank plans to manage current market shock.
OIL
Oil prices reached 11-year highs this week as concerns over supply in the aftermath of the Russian invasion of Ukraine dominated trading. While the West stayed short of banning Russian natural gas and oil exports, some shipping companies refused to accept new bookings for Russian cargo, or sail to and from Russian ports altogether. So far, OPEC+ does not see a need to increase output at a faster pace. While headlines on the Iran nuclear deal led to some relief in the market, the fundamental picture remains bullish.
