Financial markets uncertainty lingers as the war in Ukraine continues for the second month

The US stock market traded inconsistently last week. By the close of the stock market on Friday, Dow Jones (US30) gained 0.44% (+0.55% for the week), S&P 500 (US500) added 0.51% (+1.81% for the week). The NASDAQ Technology Index (US100) decreased by 0.16% on Friday but became the growth leader by the end of the week with +2.23%.

According to analysts at Bank of America, the stock market is likely to rise for several more weeks and provide investors with a good opportunity for a sell-off. Tightening monetary policy to combat high inflation and lower corporate earnings growth is likely to lead to a corrective movement in stock indices this year, so investors should rebalance their portfolios while they can.

Major European indices traded without a single dynamic on Friday. German DAX (DE30) gained 0.22% on Friday (-0.56% for the week), French CAC 40 (FR 40) decreased by 0.03% (-0.83% for the week), Spanish IBEX 35 (ES35) added 0.31% (-1.08% for the week) and British FTSE 100 (UK100) jumped by 0.21% (+1.06% for the week). Chancellor Olaf Scholz said Germany hopes to become independent of Russian oil and coal imports this year. However, analysts are skeptical about these statements since the German economy is heavily dependent on Russian energy resources, and it is extremely difficult to replace them in the short term.

Ukraine is ready to become neutral as part of a peace agreement, President Vladimir Zelensky said Sunday. Terrorist country Russia continues to kill civilians, women, and children and is unwilling to make any concessions. The US President Joe Biden called Vladimir Putin a "butcher." Kirill Budanov, head of Military Intelligence Service of Ukraine, said that Russian "butcher" Vladimir Putin seeks to capture eastern Ukraine. After more than four weeks of conflict, Russia failed to capture any major Ukrainian city, so Russia decided to focus on the southeast. The local leader of the self-proclaimed Luhansk People's Republic said on Sunday that the region could soon hold a referendum on joining Russia, as happened in Crimea after Russia seized the Ukrainian peninsula in 2014. But the whole world knows perfectly well that this referendum has no legitimacy and will not be recognized by the international community. The next stage of negotiations between Ukraine and Russia will take place in Turkey today.

Rising US Treasury yields led gold prices to fall on Friday, although the yellow metal maintained a weekly gain of more than 1% amid geopolitical tensions caused by the war in Ukraine and concerns about inflation. Gold usually rises amid heightened political and economic concerns, and the war in Ukraine and rampant price pressures in the US fueling both.

On Friday, a rocket attack on an oil depot in Jeddah, Saudi Arabia, sent oil prices up more than 1 %. Yemeni Hussein rebels claimed responsibility for the attack. Saudi Arabia has warned that it cannot be held responsible for a shortage of oil supplies on world markets in light of the ongoing attacks on its facilities. But analysts are confident that Saudi Arabia did was not going to significantly increase oil production since the war in Ukraine led to an increase in oil prices, which benefits Saudi Arabia. Attacks on the facilities have given them the best excuse not to add a single barrel beyond what they were producing.

Many analysts believe the US would be right to demand that Iran force the Tehran-sponsored Yemeni Hussein rebels to abandon any further aggression against Saudi Arabia and its energy facilities if the Islamic Republic is willing to strike a nuclear deal.

The United Arab Emirates will increase gas production by 30% to boost liquefied natural gas (LNG) supplies.

Asian markets mostly rallied last week. Japan's Nikkei 225 (JP225) gained 5.63% over the week, Hong Kong's Hang Seng (HK50) decreased by 1.92% and Australia's S&P/ASX 200 (AU200) added +1.53%.

The war in Ukraine and Russia's de facto exclusion from the global monetary system could allow China to raise the profile of its currency by challenging the US dollar, a senior Taiwanese security official said Monday. Chen Mintong, director general of the National Security Bureau, said China has always wanted to get rid of the dominance of the US dollar, and a war in Ukraine could encourage the use of the yuan. But on the other hand, if China decides to side with the United States, it would greatly improve Sino-US relations.

Main market quotes:

S&P 500 (F) (US500) 4,543.06 +22.90 (+0.51%)

Dow Jones (US30) 34,861.24 +153.30 (+0.44%)

DAX (DE40) 14,305.76 +31.97 (+0.22%)

FTSE 100 (UK100) 7,483.35 +15.97 (+0.21%)

USD Index 98.84 +0.05 (+0.05%)

Important events for today:
  • – UK BoE Gov Bailey’s Speech at 14:00 (GMT+3).

by Justforex, 2022.03.28

We advise you to get acquainted with the daily forecasts for the major currency pairs.

This article reflects a personal opinion and should not be interpreted as an investment advice, and/or offer, and/or a persistent request for carrying out financial transactions, and/or a guarantee, and/or a forecast of future events.

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