207783 February 28, 2022 22:26 FXStreet Market News
Economists at Credit Agricole CIB Research believe that the EUR/USD pair is likely to remain close to recent lows in the near-term amid escalating geopolitical tensions.
“The escalating Ukrainian crisis can fan the stagflation headwinds buffeting the Eurozone and can delay the ECB exit from its accommodative policies.”
“The euro’s relative rate disadvantage, as well as the persistent geopolitical and economic risks, can discourage foreign investors from returning to the European capital markets for the foreseeable future while further worsening of the Eurozone external imbalances can reduce net demand for EUR by corporates.”
“We think that the EUR/USD could remain close to recent lows in the near-term.”
Full Article207782 February 28, 2022 22:26 FXStreet Market News
Geopolitical tensions between Russia and Ukraine have greatly escalated during last week. The crisis will likely mark a new security paradigm for Europe and the US. Still, economists at Citibank remain confident in markets.
“We think Fed is still on track to hike in March despite rising geopolitical concerns. Besides, we expect inflation to come down possibly by Spring 2022 and global economic expansion will survive into 2023 and beyond. When lasting slowdown in inflation becomes evident, the Fed might not surprise markets with greater hawkishness.”
“The crisis could accelerate the Unstoppable Trend of ‘Greening the World’ as EU could focus on developing renewable energy capacity to be more independent from Russia. Also, a peak in long-term US interest rates – perhaps coinciding with peak inflation – may generate a stronger immediate return environment for US growth shares.”
“We believe a future 9% gain in the S&P 500 to be roughly in line with EPS gains in mid to high single digits, a pace that requires continued economic expansion.”
“If energy prices do not collapse as they did at the start of the last Fed tightening cycle in 2014 – when crude oil fell 66% over two years – we would expect broad emerging equity markets to perform well and offer diversification to global equity portfolios.”
Full Article207780 February 28, 2022 22:12 Forexlive Latest News Market News
Germany’s economy minister said they will pass a bill by April that ensures gas storage facilities are at full capacity at the beginning of winter.
The law of unintended consequences is in full display here. Germany doesn’t produce natural gas so they can’t magically make it appear. They have to buy it on the global market. They’re not exactly making friends with Russia now and if it’s not from there, they won’t be the only one fighting for LNG cargoes from the US, Qatar and Australia.
All this does is introduce a price-indiscriminate buyer into the European market.
Here is where we stand with front-month TTF:
I think it’s safe to pencil in another squeeze higher next autumn.
Full Article207779 February 28, 2022 22:12 FXStreet Market News
The Reserve Bank of Australia will announce its decision on monetary policy on Tuesday, March 1 at 03:30 GMT and as we get closer to the release time, here are the forecasts by the economists and researchers of seven major banks regarding the upcoming central bank’s decision. The RBA will likely maintain its benchmark rate at 0.1% while inflationary pressures and wage growth take center stage.
“The cash rate will be held at the record low of 0.1%. The focus will be on any shift in language in the decision statement. We expect the tightening cycle to begin this August. We anticipate that by August, with the benefit of two further readings on inflation as well as updates on unemployment and wages, the case will be made for the tightening cycle to commence.”
“We think the RBA is unlikely to deviate too much from its February guidance given that the last meeting saw quite a few updates. In addition, the central bank may add geopolitical tensions to its list of uncertainties. If the central bank drops its reference ‘to be patient’ on rate normalisation, it would be a hawkish surprise. We currently expect the RBA to start hiking rates in August.”
“The RBA will hold its policy cash rate target at 0.1%. Wages growth, which is the only missing criterion standing in the way of a rate hike, came in at 2.3% YoY in 4Q21. This is lower than the 3% rate which would be consistent with sustained inflation in the RBA’s 2-3% target range. Despite the tightness of the labour market, this has not yet trickled through substantially to wages growth. The RBA’s 3% threshold for wages may not be met until the 2Q22 wage figures are released in the second half of the year.”
“We expect the RBA to continue pushing against the very hawkish market pricing, especially following modest Q4 wage growth data.”
“We expect the cash rate target to remain at 0.10%. Though we don’t expect the RBA policymakers to give any clear hints on the timing of the first-rate hike at the March meeting, we believe that the RBA’s official statements and speeches support our base scenario of a rate hike in 3Q this year. In addition, we believe that the contraction in the RBA balance sheet (i.e. the decision to stop the reinvestment of the matured bonds) will come after the first rate hike. The RBA is likely to decide to reinvest the proceeds of the matured bonds in May in order to minimise any adverse impacts on the financial markets.”
“RBA Board meeting Citi cash rate forecast; 10bps, Previous; 10bps – this week’s RBA Board meeting will be framed against the context of easing COVID-19 restrictions, recent data showing only modest wages growth, the likelihood of a slower GDP growth rate at the end of 2021 than expected by the Bank and conflict between Russia and Ukraine. Given recent communication from the RBA about remaining patient, this should keep it treading a neutral path and making very little in the way of changes to the monthly policy statement. The measured and neutral policy guidance from the RBA will stand in stark contrast to the more hawkish guidance provided by the RBNZ.”
“We expect no changes to policy settings, the target cash rate staying at 0.10%. The Q4’21 wages report was largely in line with the RBA’s forecast, so the Bank is likely to reiterate it remains ‘patient’ as the pick-up in wages growth is expected to be ‘gradual’. Unfolding Ukraine-Russia tensions are unlikely to rate a mention. The Q4’21 wages outcome makes a Jun’22 hike less likely. It’s more likely the RBA shifts to a hawkish stance at that meeting and delivers a hike in Aug as we expect. AUD risks are skewed higher if the outcome leans more hawkish than dovish.”
Full Article207778 February 28, 2022 22:12 FXStreet Market News
The war in Ukraine is a tragedy. Economists at ING take a first look at the sanctions and broader possible economic implications from the sanctions and the war.
“In the shorter run, disruptions to the energy and commodity supply will weigh on growth and push up inflation for longer. Particularly in Europe, the risks of stagflation have increased.”
“For the European Central Bank, but also for other central banks, this new situation is likely to slow down or delay policy normalisation. At the ECB’s meeting next week, any hints of rate hikes are out of the question. We expect the ECB to avoid tying its hands in any direction; still announcing a taper, while not ruling out new easing of monetary policy if needed.”
Full Article207777 February 28, 2022 22:09 FXStreet Market News
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207776 February 28, 2022 22:05 FXStreet Market News
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
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207774 February 28, 2022 22:05 FXStreet Market News
Bitcoin (BTC) is holding it together all-in-all quite well as price action dipped lower over the weekend but is back up for the day as Bitcoin sees an uptick in demand at the start of the week. That demand comes from Russian people using Bitcoin as an alternative method of payment as the local currency has devalued considerably, and several sanctions are making it impossible to use FX alternatives. With this renewed interest, expect to see BTC price action rise towards $39,780, holding a 10% profit potential.
Over the weekend, price action got rejected to the downside and saw a 7% devaluation. Yet with the introduction of several sanctions onRussia, significant demand is being seen for Bitcoin as Russians seek alternative payment methods as their own currency has devalued sharply by 20% on Monday morning, and foreign currencies are forbidden as a form of payment.
This is the perfect background for Bitcoin and other major cryptocurrencies to get renewed positive attention. Several Russians will be opening a crypto wallet and buying into Bitcoin price action, which could propel price action towards $39,780 in the first phase.once Bitcoin becomes the standard form of payment in Russia, and as the Relative Strength Index still has plenty of room to go, expect to see a further move to the upside, hitting $41,756 in the near term.
BTC/USD daily chart
Depending on the current peace talks underway this afternoon between Russia and Ukraine, expect to see a possible dip back towards $38,073 or even $36,709 as the supportive baseline in these past few days. Should the situation deteriorate again and see renewed attacks – and even the use of Russian nuclear weapons – expect to see a sharp nosedive move towards $32,650, nearing the distribution zone from a few months ago. With that move, the Relative Strength Index will have entered the oversold area, however, suggesting an increased likelihood of an eventual recovery.
Full Article
207773 February 28, 2022 22:02 FXStreet Market News
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
207772 February 28, 2022 22:02 FXStreet Market News
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
207771 February 28, 2022 21:56 FXStreet Market News
The US Goods Trade deficit widened to $107.63B in January, a new record high, much larger than the expected monthly deficit of $99.6B and much larger than December’s deficit of $100.47B, according to data from the US Bureau of Economic Analysis released on Monday.
The latest much larger than expected US trade deficit figures do seem to have weighed a tad on the US dollar, with the DXY falling back under the 97.00 level in recent trade and into the 96.80s. But US data will take a backseat as a USD driver this week to geopolitical developments as the Ukraine war rumbles on and Western sanctions versus Russia evolve.
Full Article207770 February 28, 2022 21:56 FXStreet Market News
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
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The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.