25 March 2022 - Stocks bounce back as AUD continues to consolidate higher


Market Headlines

U.S. stocks rose Thursday, putting Wall Street indexes on course to recoup some of Wednesday's losses, led by gains among semiconductor and materials stocks. The number of Americans applying for first-time unemployment benefits fell to 187,000 in the week ended March 19 -- the lowest level since September 1969 down from 215,000 in the week prior. The US unveiled new sanctions against Russia, including targeting 328 members of Russia's parliament. Oil has been fluctuating on the prospect for peace in the War in Ukraine. A couple of new developments over recent days are driving the recent volatility.

Firstly , Ukraine President Volodymyr Zelenskiy offered that Russia could annex Ukrainian lands, but only subject to a public referendum on the issue in Ukraine, this is seemingly a non-starter for Russia

Secondly, the US’s formal accusation that Russia committed war crimes in Ukraine may also extend the war, by motivating Russia to win more decisively. The premise is that the winners get to write the history and get to call the trial.

Following a meeting in Brussels that included President Joe Biden, NATO Secretary-General Jens Stoltenberg reportedly said the 30-member alliance committed more naval and air warfare aid for Ukraine while agreeing to beef up its defence capabilities in Europe. The leaders also urged China not to support the invasion.

FX

AUD/USD

AUD/USD traded as high as 0.7527, holding nearby heading into Friday’s Asian trading. Strengthening gold prices and the better tone of equities provide support to the already strong Aussie. From a technical perspective, the overnight strong move up validated a near-term bullish breakout through the 0.7375-0.7380 resistance zone. A subsequent strength beyond the 0.7400 mark and the previous YTD high support prospects for additional gains.


EUR/USD

The EUR/USD pair saw limited action on Thursday, bouncing once again from the 1.0960 price zone but unable to extend gains beyond the 1.1000 figure. The dollar is generally weaker, despite financial markets having little to cheer. Mid-US afternoon, headlines hinted at progress in ceasefire talks between Kyiv and Moscow, but ahead of those, news from the war front were mostly discouraging. US President Joe Biden and European NATO counterparts are preparing for the risk of Moscow launching a nuclear attack. They have also discussed assisting Ukraine with anti-ship missiles and clarified that any gold transaction involving Russia's central bank is subject to existing sanctions.


GBP/USD:

GBP/USD managed to erase its daily losses but seems to be having a difficult time holding above 1.3200. Rising hopes for a diplomatic solution between Russia and Ukraine not enough to boost pound. GBP/USD has gone into a consolidation phase near 1.3200 early Thursday after having closed in negative territory on Wednesday. The improving market mood is helping the pair hold its ground for the time being but a decline below 1.3160 could open the door for additional losses.



USD/JPY:

USD/JPY continued scaling higher on Thursday and shot the highest level since December 2015. The divergent Fed-BoJ monetary policy outlooks weighed on the JPY amid a positive risk tone. Elevated US bond yields underpinned the USD and remained supportive of the strong move up. Rising bond yields could support a push to the 122.00 mark.


In bond markets, the yield on the benchmark 10-year Treasury note ticked up to 2.340% from 2.320% Wednesday.


Commodities

WTI Crude futures slipped by $3.51 to $111.42

Gold for April delivery climbed by $24.80 to $1,967.00 per ounce.

Silver finished higher at $28.81 per troy ounce.


To watch for

• UK – Mar Consumer Confidence

• US – Feds Daly & Williams speak

• UK – Feb Retail Sales

• SP – Feb PPI m/m

• IT – Mar Consumer Confidence


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Disclaimer

This material is provided by Navigate Global Payments (Navigate) ACN 615 699 888, AFSL 502711.  The material contains general commentary only and does not constitute investment or any other advice.  Certain types of transactions, like futures, options and high yield securities can be risky, and not suitable for all investors.  This information has been prepared without considering your objectives, financial situation or needs.  Please seek your own independent legal or financial advice before proceeding with any investment decision.  The information is believed to be accurate at the time of compilation and is provided in good faith.  Navigate does not warrant the accuracy or completeness of any information contributed by a third party. The information is subject to change without notice and Navigate is under no obligation to update the information. The information contained in this material are opinions of the author at the time of writing and does not constitute an offer, recommendation to act, a solicitation of an offer, or an inducement to subscribe for, purchase or sell any financial instrument or to enter a legally binding contract.  This information, including any assumptions and conclusions is not intended to be a comprehensive statement of relevant practise or law that is often complex and can change.  Past performance is not a reliable indicator of future performance. Any forecasts given in this material are predictive in character.Navigate Global Payments Pty Ltd nor its related parties or officers accepts no liability whatsoever for any loss or damages suffered through any act or omission taken as a result of reading or interpreting any of the information contained or related to this site.