1 Minute Market Rundown – 18th March 2022
Russia – Ukraine
Risk bounces
Crypto finds support
Dovish hike by the Old Lady
Risk continued to hold in well yesterday as equity and crypto markets held on to gains posted recently. Overnight we have seen the equity rally stall as the surge in Chinese tech stocks fizzled out and oil moved back above $100 a barrel. We have seen a few central banks announce their monetary policy decisions this week. It seems the theme thus far is, ‘peak central bank hawkishness is here,’ which along with more constructive news out of Ukraine has helped improve risk sentiment this week.
Yesterday the major release was the BoE interest rate decision which was a 25bp hike as expected. It was seen as a dovish hike as MPC members acknowledged that the squeeze on real incomes is likely to be materially larger than assumed in February. GBP was sold off aggressively on the release but recovered as the USD came under pressure.
Crypto just trades quietly bid which is a good sign. The last few days have seen the alts do well as risk sentiment improves and it is good to see BTC and ETH trading where they are. Ultimately though they continue to trade within the ranges we have seen for a while now. Starting to sound like a broken record, but we do really need to see $45-$47k and $3300-$3500 breached in BTC and ETH respectively if we want to see the next leg higher in markets. For that to happen, it feels like we would need something more substantially positive coming out of Ukraine. Volumes still remain low and to encourage money off the sidelines and back into risk markets we need something more. In other news Apecoin – token linked to Bored Ape Yacht Club – had a blockbuster opening, dropping 80% after it was airdropped to owners. HSBC enters the metaverse through a partnership with the Sandbox.
We are cognisant today is Friday and the last few Friday’s have shown us the market is less inclined to head into the weekend long risk – understandably so as we are at the mercy of headlines. The Asian session has indicated we may see more of this through European and US sessions. On the day we are happy to sit short EUR/USD and GBP/USD, as we foresee some profit taking and expect risk to struggle to rally on the day.
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This update: 14 Oct 2020
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