AM Analysis
Global bourses look set to reverse from their significant losses
Global bourses look set to reverse from their significant losses that occurred yesterday as Russia’s apparent ultimatum passes with no action as of yet. With no new headlines breaking on the geopolitical situation, it looks like investors are taking this opportunity to claw back the sleep losses of yesterday’s session with Spreadex calling the FTSE 100 up around 65 points. Yesterday saw investors scramble to buy Gold sending the precious metal up over $20, however as stocks rebound, the yellow metal has been brought back in line, currently down around $13.
We have quite a thin economic calendar today with the only notable piece of data released being GBP construction PMI, which is expected to come in at 63.6. Overnight saw the release of important Australian data with building approvals coming in significantly ahead of consensus at 6.8%, cash rate at 2.50% and the RBA statement which said the reserve bank is reluctant to change the cash rate over the following months.
With the lack of data driving markets in any significant direction, investors will be closely watching for any clarity on the Ukraine situation, which should slowly come to light throughout the day.
– Sam Fox
PM Analysis
Equities have continued on their tear from the morning
Equities have continued on their tear from the morning as markets re-price risk in light of the worst-case scenario for Ukraine being avoided. US and European stocks have gained back what they lost yesterday and more, with the FTSE 100 closing over 6,800 once again. Unsurprisingly, it’s been a day of reversals, as those stocks getting slammed yesterday outperform. Gold stocks, the destination of the fear trade yesterday, found lower ground today.
Markets, as they often do, can provide more clarity on the seriousness of geopolitical risks than the best commentary. Aggregate flows offer a reflection of the probability of outcomes by way of prices. Prices that yesterday held the biggest effect of the crisis towards Russian and German stocks. Today, prices have reverted – a sign not just great for equities but for geopolitical outcomes, too.
– David White
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