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MTrading Team • 2022-03-17

Risk-on continues as Russia-Ukraine peace talks, China supersede Fed’s rate-hike, cryptos pare gains

Risk-on continues as Russia-Ukraine peace talks, China supersede Fed’s rate-hike, cryptos pare gains

Fed’s widely anticipated 0.25% rate hike couldn’t tame the market’s optimism as Chairman Jerome Powell, as well as ECB’s President Lagarde, expected downside risk to inflation. The risk-on mood gained support from progress on the Russia-Ukraine peace talks and China’s sustainably weak covid figures and eagerness to support economic growth. Even so, indecision over the current geopolitical issues and global leaders’ hard stand against Moscow chained the bulls.

The US dollar failed to cheer the Fed’s rate-hike, which in turn helped commodities and Antipodeans to remain firmer. The move favored AUDUSD the most on the Aussie jobs report.

Gold prices recovered after a three-day downtrend while Brent Oil prints the first positive day in four.

Nasdaq rose the most in over a week while Japan’s Nikkei and Hong Kong’s Hang Seng kept fueling the Asia-Pacific equities. Though, the European markets traded sluggishly with mild losses at the latest.

BTC rallied to a weekly high and ETH refreshed the fortnight top before consolidating the up-moves.

Check the latest performance of key financial assets on MARCH 17:

  • BRENT OIL prices mark the biggest daily gains in over a week around $99.25.
  • GOLD gains around 0.80% while approaching $1,950.
  • USD INDEX prints four-day losing streak, down 0.06% near 98.30.
  • DOW JONES extended gains while closing around 34,063, up 1.55%.
  • NASDAQ rallied 3.77% while closing the day at 13,436.55.
  • DAX drops 0.37% reaching 14,357 rate.
  • FTSE 100 declines 0.20% as sellers poke 7,300 level.
  • BTC/USD prints 0.90% intraday loss to $40,760.
  • ETH/USD snaps three-day uptrend with mild losses around $2,770.

Wall Street played down Fed, China-Japan pushes Asian markets but Europe remains dull

Discussions over the Russia-Ukraine peace plan bolstered market sentiment before Fed’s Powell cited hopes of easing inflation, despite signaling six more rate-lifts in 2022.

Further easing in China’s covid numbers and financial policy committee’s promise to keep markets stable, also reduce hardships for property and tech companies, extended the previous risk-on mood to Asia-Pacific bourses. Japanese PM’s indirect push to keep the easy money flowing also contributed to the upbeat sentiment in the region.

It should be noted, however, that markets in Europe fail to stretch previous gains as Eurozone inflation rose more than initially estimated in February while OECD cited over 1.0% global economic loss due to the Ukraine-Russia conflict. In doing so, traders in Brussels ignore ECB President Christine Lagarde’s efforts to tame reflation woes.

Elsewhere, BTC and ETH struggled over indecision for crypto tax in India as market players push hard to reduce 30% income tax on any earning from cryptocurrencies and 1.0% transaction tax.

A likely calmer end to the week ahead

Having witnessed volatile markets during most of the week’s days, as well as gone through the key market data/events, global traders may take a sigh of relief amid an absence of major catalysts during late week-day and weekend.

Even so, the Russia-Ukraine story, Bank of Japan’s (BOJ) monetary policy meeting and inflation fears may keep entertaining traders.

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