High geopolitical risks certainly remain, but markets are seeing a slight rebound in prices of risk assets. Investors are starting to consider that uncertainties related to the Ukraine war and Russian sanctions are largely built into current market pricing. Asian stock markets closed lower, but European and US markets opened higher. After reaching $130 a barrel on Monday, WTI oil prices are currently trading near $117. UST 10Yr yields have moved back up over 1.90%. The dollar is broadly lower, the euro is up 1% and back over $1.10. Traders await tomorrow’s US CPI for February, and next week’s Fed meeting – a 25 bps rate hike is expected.
“It is not enough to win a war; it is more important to organize the peace.”
March 9, 2022
EUR/USD 1.1038 GBP/USD 1.3163 USD/CAD 1.2824 AUD/USD 0.7328 USD/JPY 115.75 USD/CNH 6.3182 USD/ILS 3.2639 USD/MXN 20.9740 USD/CHF 0.9280 USD/INR 76.5650 USD/BRL 4.9959 USD/SGD 1.3583 USD/DKK 6.7474 USD/SEK 9.7068 USD/NOK 8.9036
The dollar is broadly lower as markets take a pause from the recent risk-off panic. Market pundits suggest that the current status on the ground in Ukraine and sanctions on Russia may be already reflected in markets pricing. Tomorrow’s CPI for February is expected to be 0.8% MoM, up from January’s 0.6%.GBP
The UK pound is higher on broad dollar weakness. There were no key economic stats for the UK today, but it was reported that UK petrol prices rose at the fastest pace in 13 years last week. Traders await Friday’s slew of economic stats for the UK.EUR
The euro has jumped back above $1.10 in line with broad dollar weakness. Currency option markets show that “risk-reversals” which offer downside protection for the euro stand at the most expensive level in more than a decade. Tomorrow the ECB meets, and no change in benchmark rates is expected.CAD
The Canadian dollar strengthened for the first time in five days. CAD lags behind other G-10 currencies within a mild rebound versus the US dollar. Lower oil prices serve as a headwind for CAD gains. Traders await various economic data for February to be released on Friday.ASIA/PACIFIC
The JPY is the only G-10 currency not making gains versus the USD as rising US interest rates overnight take a toll on the yen.
For more analysis on FX markets or information regarding SVB's FX services:
See all of SVB's latest FX information and commentary at www.svb.com/trends-insights/foreign-exchange-advisory
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