- European stocks close mostly flat
- Upbeat moods on Wall Street
- Chinese stocks sink further
- Oil continues its drop
Tuesday's session in the Old Continent brought a deterioration in sentiment due to the escalation of the conflict in Ukraine. Initial upbeat mood evaporated, after Vladimir Putin's stated that Ukraine is not ready to make concessions. Markets also remain concerned about the rise in new Covid-19 cases in China and the lockdown in Shenzhen. Investors try to assess how this could affect supply chains of key commodities and high-tech products. For this reasons another heavy selling took place today with major Chinese indices dropping 4-6%. On the data front, ZEW index fell to -39.3 compared to analysts’ expectations of+10.5. ECB president Lagarde comments brought some short-lived optimism to the markets. Head of ECB stated that the EU economy can still count on strong growth in 2022, despite the sanctions. Germany’s DAX finished below the 14,000 level, while other major bourses ended today’s session little changed.
Major Wall Street indices rose on Tuesday, as oil prices continued to move lower and a reading of wholesale inflation came in lighter than expected, although the impact of the recent surge in commodity prices was not captured yet. Dow Jones trades 1.0% higher, the S&P 500 rose 1.20% and the Nasdaq gained around 1.70%%. Increased volatility is expected to continue tomorrow as the Fed will deliver its monetary policy decision. Investors expect a 0.25% rate hike, which would be the first increase in the fed funds rate since 2018.
Downbeat moods prevail in most commodities markets despite a weaker dollar. US 10-year Treasury yields jumped to 2.15% while precious metals took a hit. Gold price pulled back to $1907 level, however sellers managed to erase some of the losses and bullion currently trades around $1922.00. Oil prices continued to fall to levels not seen since the Russian invasion of Ukraine. Both WTI and Brent fell below psychological $100.00 per barrel amid ongoing ceasefire talks between both sides and fears of a demand slowdown from China following the reimposition of fresh lockdowns. Upbeat moods prevail in the agriculture sector, where wheat and corn jumped 5%.00 and 4.0% respectively. Major cryptocurrencies were rather muted during today's session. Bitcoin continues to trade above 39,000, while Ethereum cut early losses and is testing the $ 2,600 resistance.
Silver pulled back following a failed attempt of breaking above resistance at $27.00. Price is currently testing local support at $24.67 which coincides with 38.2% Fibonacci retracement of the downward correction launched in August 2020. Should a break lower occur, a downward move may accelerate towards support at $23.45 which is marked with a lower limit of the 1:1 structure and 200 SMA (red line). Source: xStation5
