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Wall Street spikes following Wednesday’s sell-off

The news shaping the markets today

Ukrainian President Volodymyr Zelenskyy appealed to the EU leaders for a quick membership to join the common bloc. The RUB/USD forex pair came under pressure following the news.


UK’s GfK consumer confidence indicator fell to its weakest level in 16 months, at -31 in March, coming in below market expectations of -30. Despite this, the GBP/USD pair climbed in forex trading this morning.


The Philippines reported a decline in its business confidence index to 32.9 in the first quarter, from 39.7 in the previous three-month period, which was the strongest reading since the first quarter of 2020. However, the PHP/USD forex pair recovered after the news.


Mexico’s central bank announced plans to increase the overnight interbank interest rate by 50 basis points to 6.5% at its latest meeting. The MXN/USD pair remained broadly flat in forex trading this morning


Colombia’s industrial confidence indicator rose to 15.6 in February, from 12.7 in the previous month. Despite business sentiment hitting the highest level since September 2020, the COP/USD forex pair remained under pressure.

 

What’s happening: US stock recorded gains on Thursday, as traders assessed the meeting of Western leaders over Russia.

What happened: Wall Street moved higher on Thursday, after faltering in the previous session, following a week of significant gains.

Investors also closely monitored the release of several economic reports.

Why it matters: Joe Biden attended both NATO and G7 summits and had a meeting with EU leaders on Thursday.

The leaders of the Western world announced plans to strengthen their forces in Eastern Europe and increase sanctions on Russia following its invasion of Ukraine. Russia’s assault on Ukraine entered its second month on Wednesday, which has resulted in a sharp downturn in the global equity markets and a surge in oil prices.

On Wednesday, Federal Reserve policymakers signalled they were ready to take further aggressive steps to cool off the elevated inflation levels, including the possibility of a half-percentage-point rate hike at the May’s policy meeting.

Investors responded positively to a decline in US initial jobless claims, by 28,000 to 187,000 in the week ended March 19, versus 215,000 in the prior period. New orders for US manufactured durable goods declined 2.2% in February, while the current account deficit shrank to $217.9 billion in the fourth quarter, versus a gap of $219.9 billion in the previous period. The S&P Global US Composite PMI climbed to 58.5 in March, from 55.9 in the prior month.

Crude oil prices eased on Thursday, after the US and its allies discussed plans to increase the release of their oil reserves to provide some relief to the energy markets.

Technology stocks provided a boost to the US stock markets on Thursday, after recording a sharp selloff in the previous session. The tech-laden Nasdaq 100 jumped 2.2% to close at 14,765.69. The Dow Jones added 349.44 points, or 1.02%, to settle at 34,707.94, while the S&P 500 rose 1.43% to 4,520.16.

What to watch: Traders await economic data on pending home sales and consumer sentiment from the US. Pending home sales, which contracted by 5.7% to 109.5 in January, are expected to grow by 1% in February. The University of Michigan consumer sentiment index is projected to decline to 59.7 in March, from 62.8 in the previous month.

Markets will continue monitoring the ongoing crisis in Ukraine and keep an eye on the decision by Western nations to impose further sanctions against Russia.

The markets today

The Canadian dollar will be in focus today ahead of a couple of economic reports from the country

 

Context: The CAD/USD pair traded higher, recording gains for the eight straight day on Thursday.

Details: With the US Federal Reserve raising interest rates at its latest meeting, markets expect Canada’s central bank to follow suit and announce a rake hike of around 200 basis points this year.

The price of crude oil, one of Canada’s major exports, declined 2.3% to close at $112.34 per barrel, after recording gains on Wednesday.

“With equity markets more comfortable – for now – with the global risk backdrop, we expect fundamental drivers to support a stronger CAD in the coming weeks,” Scotiabank strategies said in a note to clients.

The CAD/USD forex pair rose around 0.3% to close at $1.2528 on Thursday, notching gains for the eight straight day.

Canadian government bond yields traded higher on Thursday, with the 10-year inching closer to the three-year high of 2.443% it recorded during the previous session.

What to watch: The ongoing Russia-Ukraine conflict will remain a major concern for markets.

Traders will also focus on a speech by Bank of Canada Deputy Governor Sharon Kozicki on monetary policy, scheduled for later today.

Investors also await economic data on manufacturing sales and government budget value from Canada today. Manufacturing sales in Canada, which grew 0.6% to C$64.8 billion in January, are expected to grow another 1% in February. Canada’s government budget is expected to show a C$1.7 billion deficit for January, following a C$3.58 billion surplus in December.

Other Markets: European trading indices closed mostly lower on Thursday, with the DAX 40, CAC 40 and STOXX Europe 600 down by 0.07%, 0.39% and 0.21%, respectively. The FTSE 100 bucked the trend, rising by 0.09%.

Support & resistances for today

Technical Levels News Sentiment
EUR/USD – 1.1028 and 1.1034 Positive
S&P 500 – 4499.94 and 4520.52 Positive
Dow Jones – 34658.04 and 34735.56 Negative
USD/CAD – 1.2527 and 1.2531 Positive
Silver – 25.959 and 26.026 Negative

 

Market snapshot

What else to watch today

Turkey’s manufacturing confidence index AND capacity utilization, UK’s retail sales, Spain’s GDP growth rate and producer price inflation, China’s current account, Eurozone’s household credit growth, loans to non-financial corporations and money supply M3, Germany’s Ifo business climate indicator, Ifo current conditions index and Ifo expectations index, Italy’s manufacturing confidence, and consumer confidence, Brazil’s FGV consumer confidence index and IPCA-15 consumer price index, France’s initial jobless claims and unemployed persons, India’s foreign exchange reserves, bank loan growth and deposit growth, Mexico’s economic activity, Argentina’s consumer confidence indicator, as well as US Baker Hughes crude oil rigs.

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