The top five events affecting markets this week

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The wild ride on Wall Street continued this week as US stocks rebounded on hopes that Russia and Ukraine may find a diplomatic solution to end the bitter war. The Ukraine President said his country is open to discussing Russia’s demand for neutrality in return for security guarantees.

The Australian share market, the ASX200, recovered from early losses on hopes of a ceasefire between Russia and Ukraine and despite a solid round of profit-taking in commodity markets.

Here is a review of the top five things that happened in markets this week:

1. Crude oil plunges

A stunning reversal for crude oil, falling from above $125 to below $104 on news that the US made progress towards encouraging other producers, including Iraq and the UAE, towards increasing supply. As the members of OPEC+ have consistently missed production targets in recent months due to years of underinvestment, the price of crude oil quickly reclaimed $110.

2. EURUSD best day since 2016

The EURUSD had its best one-day rally since 2016 on short-covering, after falling more than 6 per cent over the past month on war concerns.
The decline in the EURUSD resembled more closely the unruly characteristics of an EM currency pair rather than a DM currency pair as the market rerated the risk premia attached to European assets.

3. Gold falls at the final hurdle

Gold traded to as high as $2070 early in the week, just $5 short of its August 2020, $2075 high before a possible ceasefire between Russia and Ukraine saw the precious metal collapse back below $2000.

4. Chaos in the nickel market

The London Metal Exchange (LME) suspended trading in nickel as its price soared following Russia’s invasion of Ukraine.
The extraordinary measure was taken to allow traders to defer delivery on contracts for future nickel delivery after a 90 per cent price rise in Monday trading triggered a round of margin calls.

5. Biden boosts Bitcoin

Bitcoin rebounded above $42,000, following an executive order from the Biden administration that called for a coordinated and comprehensive approach to digital assets.
The move will facilitate continued innovation in the digital asset space and provide more protection for consumers and investors alike.

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All trading carries risk. Past performance is not a reliable indicator of future performance. This report does not contain and is not to be taken as containing any financial product advice or financial product recommendation.

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