Today, President Biden may announce a ban on imports of Russian oil, and do so without participation of our European allies. Crude oil prices rose to $125 a barrel on the news. Global stocks are mixed – Asia mostly lower, Europe mixed, US S&P 500 opening slightly higher. The US dollar is mixed against peer currencies. The euro moved higher following news that the European Union plans to issue a joint bond to finance energy and defense spending. Market volatility, particularly in commodity prices, is at multi-year highs.
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March 8, 2022
EUR/USD 1.09 GBP/USD 1.3124 USD/CAD 1.2848 AUD/USD 0.7284 USD/JPY 115.56 USD/CNH 6.3186 USD/ILS 3.3053 USD/MXN 21.4491 USD/CHF 0.9284 USD/INR 76.9150 USD/BRL 5.0948 USD/SGD 1.3640 USD/DKK 6.8363 USD/SEK 9.9765 USD/NOK 8.9832
The US dollar is mixed against peer currencies as markets remain in a severe underlying risk-off mood. The proposed US ban on Russian oil will probably be without buy-in from our European allies, as the US imports only 2% of its oil needs from Russia, whereas in Europe it’s 40%. UST yields are climbing higher, trading at 1.85% after last week’s low of 1.68%. Traders await US inflation data on Thursday.GBP
The UK pound dropped to a 17-month low at $1.3082, but the current GBP/USD rate is little changed overnight. UK gasoline prices were reported to have risen at the fastest pace in 13 years and house prices at the strongest annual pace since 2007. Traders await a slew of economic releases later this week.EUR
The euro is firm after news of a large EU bond-sale proposal, which may be presented next week, to finance energy and military infrastructure. Economic data for the eurozone came in as expected – Employment QoQ rose 0.5% and GDP QoQ expanded by 0.3%. A measure of Fixed Capital Investment in the eurozone rose much higher than expected (3.5% QoQ).CAD
The CAD trades near yesterday’s close despite soaring oil prices. Canada’s trade balance moved back into surplus in January as imports in the auto sector declined sharply. Traders await Friday’s slew of economic data for Canada.ASIA/PACIFIC
The Australian dollar underperformed as reports that large leveraged FX traders positioned “long” AUD were forced to unwind when the AUD/USD broke below $0.73.
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