Failed peace talks between Russia and Ukraine boost oil prices (again)
Market volatility expected to continue
Traders await Powell comments
US futures on the Dow Jones, S&P 500, NASDAQ, and Russell 2000 retreated in trading on Monday while European stocks wavered amid increased market volatility. Traders remain concerned about the ongoing war in Ukraine and the impact that sanctions on Russia and supply chain disruptions will have on global economies. Markets will be closely watching any comments from Fed Chair Jerome Powell when he speaks this week.
Oil spiked again today, increasing concerns of continued high inflation weighing on future economic growth.
Global Financial Affairs
Contracts on the four leading US indices were red to start the trading week, led by futures on the Russell 2000 while contracts on the S&P 500 Index gave up the least ground. The dip suggests traders may be taking a breather after the underlying benchmarks registered their sharpest weekly upticks last week, since November 2020.
The STOXX 600 Index opened higher but then slipped after Germany’s PPI jumped to a record 25.9%, which was not as bad as the estimated 26.2%. The rise in the “factory gate” cost—a product’s price before transport or delivery charges apply—a key indicator of consumer prices, was the largest since 1949.
STOXX 600 Daily
The pan-European index’s rally stalled, having reached the neckline of an H&S top, during which time the 50 DMA crossed below the 200 DMA, triggering a Death Cross.
The FTSE 100 rallied on the back of a strong performance by BP (LON:BP) and Shell (LON:RDSa) which each benefited from the ongoing rally in oil prices due to the conflict in Ukraine.
FTSE 100 Daily
In a mirror image of European stocks, the leading UK index respected its uptrend line since the 2020 bottom. Its moving averages also performed a Golden Cross on the weekly chart.
Yields on the 10-Year Treasury note extended their rally as investors continued unloading Treasuries in favor of future long-dated bonds with higher payouts.
10-year Treasuries Daily
The price completed a weekly H&S bottom, and yields crossed over the 200 WMA.
The dollar gave up gains and fluctuated around Friday’s closing price.
Dollar Index Daily
The greenback is finding support by the neckline of an H&S bottom.
Gold opened lower.
The yellow metal is testing a Morning Star after a return move toward a giant symmetrical triangle.
Bitcoin edged lower.
The cryptocurrency traded within a symmetrical triangle after an H&S top.
As peace talks between Ukraine and Russia stall, oil rallied and is fluctuating around $107 a barrel.
The price is threatening to blow out a small H&S top.
EIA crude oil inventories are reported on Wednesday.
UK CPI figures are published on Wednesday.
On Wednesday, US new home sales are announced.
Futures on the S&P 500 fell 0.2%
Futures on the NASDAQ 100 fell 0.4%
Futures on the Dow Jones Industrial Average fell 0.3%
The STOXX 600 fell 0.1%
The MSCI World index was little changed
The Dollar Index was little changed
The euro fell 0.01% to $1.1048
The British pound fell 0.2% to $1.3153
The Japanese yen was little changed at 119.22 per dollar
The yield on 10-year Treasuries advanced four basis points to 2.19%
Germany’s 10-year yield rose to 0.40%
Britain’s 10-year yield increased to 1.54%
West Texas Intermediate crude rose 4.5% to $109.37 a barrel
Gold futures fell 0.1% to $1,931.10 an ounce