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MTrading Team • 2022-03-22

Markets flip-flop on yields, Ukraine-Russia updates, BTC rises but oil reverses from fortnight top

Markets flip-flop on yields, Ukraine-Russia updates, BTC rises but oil reverses from fortnight top

A multi-month high of the US Treasury yields joined comments from Ukraine President Volodymyr Zelenskyy and his US counterpart Joe Biden to initially weigh on the market’s sentiment and underpin the US dollar’s gains during Tuesday. However, as the European session unfolds Zelenskyy’s attempt to renew peace talks with Russia and Moscow’s ability to avoid another default triggered risk-on mood and pushed the greenback towards paring daily gains.

Even so, prices of gold and crude remain on the back foot while European and British equities print mild gains despite Wall Street’s losses.

Moving on, BTC and ETH remain on the front foot amid a pan-positive move in the crypto markets.

Here go the detailed moves of the key financial assets on MARCH 22:

  • BRENT OIL pauses three-day uptrend with 1.0% loss to $115.20.
  • GOLD remains mildly offered around $1,930 after positive start to the week.
  • USD INDEX rises for the third consecutive day while poking 99.00.
  • DOW JONES, NASDAQ and S&P 500 began the week on a back foot.
  • DAX rises 0.45% reaching 14,445 rate whereas FTSE 100 reaches 7,485 level, up 0.55% intraday.
  • BTC/USD prints 4.70% daily gains as bulls attack $43,000.
  • ETH/USD rises 4.50% while approaching the $3,050 mark.

While risk-on could be eyed during the week-start, the latest challenges to sentiment and firmer yields challenge the optimists.

  • Strong buy: DAX, FTSE 100, ETH/USD
  • Strong sell: Brent oil, DOW JONES, NASDAQ
  • Buy: USD Index, BTC/USD
  • Sell: Gold, USD/JPY

Fedspeak propelled bond yields but sentiment seesaws on mixed updates

US Treasury bond coupons rallied to the three-year top after Fed policymakers, including Chairman Jerome Powell, signaled aggression over rate hikes. The yields raised recession fears and propelled the US dollar before headlines from Ukraine and Russia triggered the risk-on mood.

Even so, money markets’ bets on two rate lifts by the ECB and a 190 bps hike in the Fed rate keeps the greenback firmer, which in turn weigh on commodities like gold and crude oil.

Equities shrug off Wall Street’s losses of late with the European Central Bank (ECB) policymakers trying to reject stagflation woes.

Furthermore, BTC/USD refreshed a two-week high while printing the first positive day in three whereas ETH/USD braces for the update on the ETH mainnet and prints notable daily gains.

Central bankers, risk catalysts eyed ahead of busy Thursday

Given the slew of speeches scheduled for publishing from the ECB and Fed policymakers, market players must pay attention to them amid firmer yields.

Also important will be any headlines from Russia and Ukraine as the recently mixed mood and ongoing crisis keep taking a toll on investor confidence.

Above all, Thursday’s busy calendar comprising the preliminary PMI readings for March month and the US Durable Goods Orders for February will be an important day for the economic calendar watchers.

To sum up, risk appetite losses early-week optimism as traders await core economics to nullify the noise.

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