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MTrading Team • 2022-03-21

Brent oil cheers war concerns but US dollar trades mixed, BTC, ETH pare losses

Brent oil cheers war concerns but US dollar trades mixed, BTC, ETH pare losses

A ray of hope to overcome the Ukraine crisis faded late last week, worsening afterwards, but the markets remain divided ahead of this week’s key diplomatic talks. The following are detailed moves of the key financial assets on MARCH 21:

  • BRENT OIL prices rise over 4.0% while recently crossing the $112.00 rate.
  • GOLD remains mildly bid around $1,925 after the worst week since June.
  • USD INDEX remains indecisive above 98.00.
  • DOW JONES, NASDAQ and S&P 500 all had the best week since late 2020.
  • DAX rises 0.55% reaching 14,400 rate whereas FTSE 100 reaches 7,455 level, up 0.15% intraday.
  • BTC/USD prints 0.15% daily gains by staying above $41,300.
  • ETH/USD rises 1.62% while approaching the $3,000 mark.

The US dollar and gold lick their wounds after snapping the multi-day uptrend. The Japanese yen, however, also failed to boast about its traditional safe-haven status.

While the US equities reported the best week since November 2020, shares in the Asia-Pacific region traded mixed and the indecision gets extended to the European markets so far on Monday.

Brent oil benefits from risk-off mood as supply crunch fears gain additional catalyst, this time from Saudi Arabia.

Moving on, BTC/USD and ETH/USD posted notable weekly gains, the biggest since late January, before posting a negative day on Friday. The latest moves, however, remained positive as bulls expect further globalization of cryptos.

Ukraine turns down hopes of Putin-Zelenskyy meet, central bankers try to convince markets

By rejecting Moscow’s demand to stand down in Mariupol, Kyiv poured cold water on the face of expectations that Russian President Vladimir Putin will be ready to meet his Ukrainian counterpart Zelenskyy, the much-cheered effort of Turkey. 

Adding to the risk-off mood were headlines from China suggesting a record daily covid infections and Evergrande’s suspension of trading in Hong Kong.

Furthermore, an attack on Saudi Arabia’s oil facilities by Yemeni Houthis offered additional fuel to the geopolitical woes, which in turn propelled energy prices.

Alternatively, the People’s Bank of China (PBOC) parted ways from the global central banks and kept monetary policies unchanged, helping commodities and Antipodeans to have something to cheer for. Though, off in Japan limited the positive impact in the Asia-Pacific bloc.

It’s worth noting, however, that the latest Fedspeak has been hawkish while ECB President Christine Lagarde shrugged off fears of stagflation in an attempt to please Euro traders.

Biden’s call with European/UK leaders, Fed’s Powell will be important to watch

To exert more Western pressure on Russia, US President Joe Biden is up for a call with the leaders of France, Germany, Italy and the UK on Monday. The outcome of which is likely to add strength to the risk-aversion wave, as well as help the US dollar to pare the latest losses. The price of gold and yen, however, may struggle to remain positive in case of the USD’s rebound.

Elsewhere, the oil prices may continue extending gains as the US sent fighters to Saudi Arabia on request to battle the Yemeni Houthis. Any more negatives could help the black gold to renew the multi-year high marked earlier in March.

Cryptocurrencies are indirectly showing the traders’ confidence as Ukraine pushes for more non-conventional help and benefits from them too!

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