On Wednesday (March 9) a strong rally in European and American stock markets, driven by low-selling, Ukrainian President Zelenskiy reiterated his willingness to consider making some compromises to end the war with Russia. As safe-haven demand fell, most of the world's stock markets moved higher, with spot gold recording its first decline in five trading days, plunging 3.6% intraday to $1,976 an ounce. Affected by OPEC+ and Ukraine news, cloth oil fell $16.8, or 13%, to close at $111.10 a barrel, the largest one-day decline since April 2020.
In terms of commodities closing, COMEX April gold futures closed down 2.7% at $1988.20 an ounce. WTI April crude futures closed down $15.00, or 12.12 percent, at $108.70 a barrel, and Brent May crude futures closed down $16.84, or 13.16 percent, at $111.14 a barrel.
U.S. stocks closed: The S&P 500 rose 2.6 percent at 4,277.88 points; the Dow Jones Industrial Average rose 2 percent at 33,286.25 points; the Nasdaq Composite rose 3.6 percent at 13,255.55 points; the Nasdaq 100 rose 3.6 percent at 13,742.2 points; and the Russell 2000 rose 2.7 percent at 2016.291 points.
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A list of major markets around the world
U.S. stocks rebounded strongly, fueled by dips, and Ukrainian President Zelenskiy reiterated his willingness to consider making some compromises to end the war with Russia. The S&P 500 surged 2.6 percent, its biggest gain since June 2020. European stocks also surged, with Germany's DAX surging nearly 8 percent.
The two-week sell-off expected by investors has fully reflected the negative impact of the War between Russia and Ukraine and Russian sanctions on the world economy. However, the rebound only recovered some of the stock market's loss since the outbreak of the Russo-Ukrainian war, and the S&P 500 index is still down about 10% from the beginning of the year.
Ukrainian President Zelenskiy's chief foreign policy think tank said it was open to discussing Russia's neutrality demands as long as it was secured. Chris Low, chief economist at FHN Financial, said the rebound in risk assets suggests investors are starting to rethink value, but that doesn't mean volatility is over. The macro and micro economic impacts are still changing. The West is still studying sanctions against Russian energy, and the duration and outcome of the war remain large unknowns.
Precious metals and crude oil
As safe-haven demand fell, most of the world's stock markets moved higher, spot gold recorded its first decline in five trading days, falling nearly 3% in late trading at $1991.31 an ounce, giving back all of the previous session's gains; palladium fell about 9% sharply, leading the decline in precious metals as a pullback in oil prices helped risky assets rebound after the War in Ukraine triggered a sharp decline in risk assets.
Colin Cieszynski, chief market strategist at SIA Wealth Management, said there was a general shift in market sentiment across asset classes, but it was difficult to tell whether this was the beginning of a trade correction or a larger change, given the volatility of the market lately.
Fawad Razaqzada, a market analyst at ThinkMarkets, believes that the volatile conditions in the precious metals market will not improve until the tensions between Russia and Ukraine are resolved.
Crude oil futures plunged on Wednesday as the UAE called on OPEC+ to speed up production increases, while Ukrainian President Zelenskiy reiterated his willingness to consider some compromises to end the war with Russia; Brent crude oil fell more than 17 percent to near $105 a barrel; and the UAE said it would encourage OPEC+ members to speed up production. Zelenskiy reiterated to the German newspaper Bild that Ukraine was ready to make a compromise to end the war.
Iraqi Oil Minister Ihsan Abdul Jabbar Ismaael said at an oil conference in Houston that additional demand from oil customers has not yet been seen, that OPEC+ does not need to ramp up production at a rate that exceeds planned, and that further increases could hurt the market.
Scott Shelton, an energy expert at ICAP North America Inc., said the market hasn't lost a lot of oil, and the gains are now due to expectations of a sharp reduction in supply and a disruption to demand in the future. As long as diplomatic efforts are successful in the coming weeks, I believe oil prices can fall even more.
foreign exchange
The dollar index recorded its biggest drop in nearly two years on Wednesday, and the prospect of peace talks in Ukraine boosted investors' risk appetite; the euro rose more than 1.6 percent against the dollar, its biggest gain since March 2020, financial market risk appetite picked up and energy and commodity prices retreated from recent highs.
The dollar index fell 1.17% to 97.95, the first decline in five trading days and the biggest decline since November 2020.
The euro ended at $1.1073 against the dollar, up 1.62 percent, hitting a 22-month low of $1.0806 on Monday. The European Central Bank will meet on Thursday, but in the shadow of stagflation, money markets expect policymakers to delay raising rates until the end of the year.
Mazen Issa, senior foreign exchange strategist at TD Securities, said recent reports that the EU was discussing joint bond issuance to fund energy and defense spending have contributed to some of the trend.
He said of the euro's response to the Ukraine crisis. Looking at the options market, there are signals of a reduction in the euro's downside protection, which may suggest that the market thinks that we may be coming out of a very serious phase of this shock.
Joseph Trevisani, a senior analyst at FXStreet.com, said that a month ago, the euro was close to hitting $1.15 against the dollar, and a quick fall below $1.10 may be a bit excessive. It's a very rapid and steep movement, so I think we've seen some profits and we've seen some reversals of that trend.
Macquarie Capital's Thierry Wizman said there was clearly some optimism about the possible diplomatic mediation between Russia and Ukraine in the coming days, saying the market tentatively thought we might restore peace or achieve a truce sooner than expected.
The EURCHF rose for the third straight day after falling below parity for the first time since 2015 as safe-haven demand weakened and the possibility of central bank intervention remained; the exchange rate rose 1.3% to 1.026. Simon Harvey of Monex Europe wrote that the rise in the Swiss franc has stalled in recent days due to the rising possibility of the SNB intervening in foreign exchange.
The Swedish krona benefited from improved market sentiment, with the USD/SEK falling 3% intraday to 9.6512, its biggest drop since 2011, while the Swedish krona led the G-10 currency higher against the U.S. dollar. Elsa Lignos, global head of foreign exchange strategy at The Royal Bank of Canada, said the currency most affected by Russia's invasion of Ukraine had seen some "short positions take profits" overnight.
The Yen performed worst among the G-10 currencies, with USDJPY rising 0.18% to 115.84.
Market Highlights
[Ukrainian President Zelenskiy: Ready to make a certain compromise, the other side also needs to make a compromise]
[EIA Report: U.S. Commercial Crude Oil Inventories Excluded from Strategic Reserves Last Week Fell by 1.863 Million Barrels to 411.6 Million Barrels] U.S. gasoline inventories fell by 1.405 million barrels and refined oil inventories by 5.231 million barrels in the week ended March 4; domestic crude oil production remained at 11.6 million barrels per day.
Any proposal to increase production, especially one that is believed to help the West wean itself off on Russian crude oil, could create discord within OPEC+. In a phone call with Saudi Crown Prince Mohammed bin Salman last week, Russian President Vladimir Putin condemned all actions aimed at "politicizing global energy supply." Scott Modell, managing director of Rapid Energy Group, said the UAE was "saying what Washington wants to hear, but the final decision on March 31 is still up to Riyadh and Moscow, and if the UAE accelerates production alone, the unity of OPEC+ will be crumbling, and Abu Dhabi may not be willing to pay the price." ”
Iraq's Oil Minister Ihsan Abdul Jabbar Ismaael said that the OPEC+ (currently planned) oil production increase is sufficient to meet market demand, and the additional increase in production is likely to hurt the crude oil market; OPEC+ will only agree to increase oil production if it deems the decision reasonable. Earlier on March 9, the UAE ambassador to the United States declared that "we" are in favor of increasing production and calling on OPEC+ members to increase oil production more quickly. Subsequently, Bloomberg quoted an OPEC representative as reporting that the UAE had not discussed OPEC+ production proposals with its allies.
London Metal Exchange (LME): Many member units want to execute nickel positions. The LME will allow member units to continue to advance the transfer of nickel positions. Due to the unprecedented state of the nickel market, LME and LME clearing houses are not allowed to charge any nickel transaction fees during the suspension of trading (including transactions executed after 00:00 London time)
[Securities Daily front page commentary: short-term shocks, do not change the three underlying investment logic of A-shares] Recently, the A-share market has fallen continuously, making many investors feel sad. However, in the long run, the three underlying logics of A-share market investment are still solid and strong. Industry experts interviewed generally believe that short-term shocks do not change the long-term logic of A-shares, and the superposition of many positive factors in China will help the market stabilize and warm up, showing relative resilience. First of all, China's economic fundamentals have been improving for a long time, and "steady growth" has become the main investment logic. Secondly, the "safe haven" attribute of RMB assets is prominent, and the logic of foreign investment has not changed. Third, the valuation advantages of A-shares are fully displayed, and they have the underlying investment logic. Whether it is from the perspective of China's economic fundamentals, policies, listed companies' fundamentals, or from the perspective of funds and technology, the long-term stable and healthy development of the A-share market is worth looking forward to, and investors do not need to panic about the short-term decline.
This article originated from Huitong Network