On Thursday (March 10), the dollar rose after the release of inflation data, the euro fell for the seventh time in nine trading days, erasing gains since the ECB meeting and failing to prop up the hawkish tone of central bank policymakers. The situation in Russia and Ukraine continued to be tense, and the US CPI rose in 40 years in February, pushing gold prices higher, and spot gold closed at $1996.53 / ounce. Oil prices have paused their upward momentum, with U.S. oil falling more than 2 percent after U.S. inflation reached a 40-year high, raising fears that a spike in oil prices could lead to earlier disruption to demand.
In terms of commodity closes, COMEX April gold futures closed up 0.6% at $2,000.40 an ounce. WTI April crude futures closed down $2.68, or 2.46 percent, at $106.02 a barrel, and Brent May crude futures closed down $1.81, or 1.63 percent, at $109.33 a barrel.
U.S. stocks closed: The S&P 500 fell 0.4 percent to 4259.52 points; the Dow Jones Industrial Average fell 0.3 percent to 33,174.07 points; the Nasdaq Composite fell 1 percent at 13,129.96 points; the Nasdaq 100 fell 1.1 percent at 13,591 points; and the Russell 2000 index fell 0.2 percent at 2011.673 points.
A list of major markets around the world
U.S. stocks fell, U.S. consumer prices accelerated for the sixth consecutive month in February, and there were no signs of abating the war between Russia and Ukraine. The S&P 500 closed lower, though recovering significantly from intraday lows; technology stocks led the decline.
The U.S. Consumer Price Index (CPI) surged 7.9 percent year-on-year in February, with inflation at its highest level in 40 years. Inflation concerns led to a broad decline in U.S. Treasuries, with the 10-year yield rising to its highest level since Feb. 25 and the 30-year yield rising to a 10-month high.
Mike Loewengart, managing director of investment strategies at Morgan Stanley E*Trade, said the market may have digested the high inflation data, the focus has shifted to the War between Russia and Ukraine and the impact of the commodity rally on the downstream, and investors should be prepared to meet the turbulent market, stay rational, and not emotional.
Precious metals and crude oil
Spot gold edged higher on Thursday, closing at $1996.53 an ounce, with sharp swings over the past few trading days and a lack of progress in negotiations between Russia and Ukraine underpinning gold's safe-haven appeal. Earlier this week, investors poured into safe-haven assets, pushing gold closer to the record highs reached in August 2020.
Investors also assessed U.S. inflation data for February, which was in line with expectations but also showed prices to see their biggest year-on-year increase since January 1982.
Jim Wycoff, senior analyst at Kitco Metals, said the inflation data was certainly a potential positive for gold. However, current geopolitical factors overshadow the impact of economic data.
Georgette Boele, senior precious metals strategist at ABN AMRO Bank, wrote in the report that investors will continue to hedge inflation by buying gold, but as the Fed continues to raise interest rates, we expect the dollar to also move higher, and gold will rise mainly in currencies other than the US dollar.
Against the backdrop of sharp rises in oil and commodity prices, investors are now awaiting a new policy statement from the Federal Reserve that will release on March 16.
Oil prices closed lower in volatile trading, with U.S. oil trading down more than 2 percent and down more than $9 from a daily high, after a day of the biggest one-day drop in two years, with Russia pledging to meet contractual obligations and some traders saying concerns about supply disruptions were excessive. Since the Russian-Ukrainian conflict on February 24, the oil market has experienced its biggest volatility in two years. On Wednesday, brent crude, a global indicator, posted its biggest one-day drop since April 2020. Two days ago, oil prices hit a 14-year high above $139 a barrel.
John Kilduff, a partner at Again Capital, said that I think some war anxiety is fading from the market, we did not capture $130 twice this week, people started asking if the supply problem is really that serious, Russia is still full of supply.
Russian President Vladimir Putin said at a meeting that Russia would continue to meet its contractual obligations in terms of energy supply. Russia is a major energy producer, with one-third of Europe's natural gas and 7% of the world's oil supply coming from the country. Still, buyers shy away from oil from Russia, the world's second-largest crude oil exporter, as a result of the Russian-Ukrainian conflict, and many are unsure where alternative supplies will come from. Statements by EMI officials gave contradictory signals that exacerbated volatility.
foreign exchange
The dollar index rose on Thursday, with inflation data reinforcing bets on the Fed's March rate hike; the euro fell for the seventh time in nine sessions, erasing gains since the ECB meeting and failing to hold up the hawkish tone of central bank policymakers.
The dollar index rose 0.58% to 98.52, and market expectations for Fed tightening remained stable after the release of CPI data, with a 25 basis point rate hike at this month's meeting fully reflected in market prices.
Bipan Rai, head of North American foreign exchange strategy at CIBC Capital Markets, said our basic assumption remains that the Fed will be the most hawkish central bank in the developed world, which should support the dollar to some extent.
The euro fell 0.79% to 1.0986, the worst of the G-10 currencies; rose 0.4% at one point after the ECB policy meeting; the euro's implied volatility curve sloped downward until the one-year period; and the 1-month implied volatility was 10.4% vs around 7.8% for the 1-year period.
The ECB's unexpected decision by policymakers to accelerate the exit of monetary stimulus suggests that the bank is currently more focused on record inflation than on threats to economic growth. ECB President Christine Lagarde said the war in Ukraine was a significant inflationary upside risk, especially for energy prices.
Brown Brothers Harriman's Win Thin writes that if the ECB is unexpectedly hawkish and cannot push the euro high enough above $1.11, it means that some people are now selling while the euro is strong, rather than buying on dips.
Boris Schlossberg, managing director of the foreign exchange strategy division at BK Asset Management, said the euro suffered a double whammy: the ECB remained relatively dovish – growth was significantly weaker – inflation rose and the market really began to digest the spread between the dollar and the euro.
USDJPY rose 0.24% to 116.12, the fourth straight day higher; traders were more optimistic about USDJPY.
Commodity-related currencies all rose on the day, with USDCAD falling 0.30% to 1.2765; audible usd rising 0.52% to 0.7357, leading the G-10 currency, which fell slightly earlier by 0.5%, and the NZD rose 0.5% to 0.6873, the second straight day higher
International highlights
The ECB will end its asset purchase program at a faster pace to ensure stable liquidity. Reinvest ecblocutium bonds that are maturing until at least the end of 2024. Maintain the current level of interest rates until it is close to the 2% inflation target. Apps will be executed at a rate of €40 billion per month in April, 30 billion euros per month in May, and 20 billion euros per month in June. The app may end in the third quarter. A third round of targeted long-term refinancing operations (TLTRO) is still expected to end in June.
ECB President Christine Lagarde: The ECB will ensure that liquidity conditions are stable. The ECB will take all necessary measures to defend prices. The Russian-Ukrainian conflict was a watershed moment for Europe. The labour market is improving. Long-term inflation expectations have returned to target levels and inflation is likely to be much higher in the near term. It is increasingly likely that inflation will stabilize at 2%. In all cases, inflation will stabilize at around 2% in 2024. Unless the medium-term outlook changes, the asset purchase program will be closed in the third quarter. If the outlook changes, the ECB is prepared to change the asset purchase program schedule]
[London Metal Exchange (LME): Confirmed that the Nickel market will not resume trading on Friday, the soaring nickel price poses a "systemic risk" to the market, and it is planned to set a price range for all physical delivery contracts]
[ICE raises Brent crude oil futures margin by 32% diesel futures by 90%] The Intercontinental Exchange (ICE) has issued a notice to significantly increase the margin requirements for Brent crude oil futures and diesel futures. Oil markets have been plunged into intense turmoil this week, with margins for delivery diesel futures contracts in April rising 90% to $12,302 and Brent crude futures for Delivery Brent crude futures in May rising by 32% to $10,030, with smaller margin adjustments for subsequent monthly delivery contracts.
[U.S. Treasury Secretary Yellen: Solving inflation problems is first and foremost the job of the Federal Reserve, which is also the top priority of the Fed's work, believing that the Fed will take action against inflation, and the Biden administration does not expect most Countries in Europe to copy the US ban on Russian oil imports.
On the 10th local time, the State Customs Committee of the Government of the Russian Federation decided to prohibit the export of grains to the countries of the Eurasian Economic Union, including wheat, rye, barley and corn, before August 31 this year. In addition, the decision also calls for a ban on the export of sugars, including white sugar and raw sucrose, until August 31, but exports to the countries of the Eurasian Economic Union can be carried out with the permission of the Russian Ministry of Agriculture. (CCTV News)
Domestic news
Q: Recently, the US Securities and Exchange Commission (SEC) released the news that five listed companies in the United States have been identified as "relevant issuers" with the risk of delisting in accordance with the Foreign Company Accountability Act. What is the SFC's comment on this? A: We have noticed this situation. This is a normal step for U.S. regulators to enforce the Foreign Companies Accountability Act and related implementing rules. We have made our position on the implementation of the Foreign Companies Accountability Act on many occasions before. We respect the supervision of relevant accounting firms by foreign regulatory authorities in order to improve the quality of financial information of listed companies, but we resolutely oppose the erroneous practices of some forces to politicize securities supervision.
[Securities Times: Market positive factors gradually increase, A shares usher in a long-term violation of the bullet] From the valuation of A shares themselves, the price-earnings ratio level of major indexes has been lower than the average level of the past decade, and the valuation risk has been greatly released. According to Wind's statistical caliber, the latest rolling price-to-earnings ratio of the Shanghai Composite Index is 12.6 times, which is lower than the average level of the last decade (13.45 times) and the median level (13.6 times). In addition, judging from the main operating data of listed companies from January to February 2022, which have been intensively disclosed in recent days, the performance of many large companies or growth companies has been good, and investors have further sent "reassurance pills". Moreover, the "counter-cyclical" adjustment actions of institutions such as fund self-purchase and fund relaxation of limits have begun to appear more often, reflecting the long-term confidence of mainstream institutions in the market. Yang Delong, chief economist of Qianhai Open Source, believes that the decline in the A-share market this round actually reflects more of the panic of the emotional side than the deterioration of the fundamentals.
This article originated from Huitong Network