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By Swissquote Analysts
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Fed making BIG mistake, as Ukraine tensions hammer mood

The Russian natural gas is now bubbling somewhere in the Baltic Sea, being wasted in front of the horrified eyes of hundreds of millions of Europeans suffering from a historical energy crisis.

The European natural gas prices jumped 17% yesterday, while crude oil gained 2.30% on news that Russia now wants OPEC+ to cut output as deadlines to implement Russian fuel bans approach.

Plus, if the escalation on the energy front is not enough, governments of the four Moscow-occupied areas of Ukraine have all declared victories in the referendums with, of course, an unprecedented majority of residents saying YES to joining Russia.

The mounting tensions with Ukraine and the spike in nat gas prices fuel the European inflation expectations, but in vain. The EURUSD is pushing lower against the US dollar as recession worries mount.

The pound remains under a decent selling pressure as the Bank of England (BoE) officials are pushing the can down a very steep road, saying that it’s more appropriate to wait 5 WEEKS before taking action.

Even the safe haven assets are out of action right now. The dollar-swissy is about to test parity, as gold pushes lower as the dollar extends rally, and US yields rise.

The Fed officials make sure no one breath. But it is well possible that after having wrongly insisted that inflation was ‘transitory’, the Federal Reserve (Fed) could now making a second Big Policy Mistake of tightening beyond-appropriate.

Watch the full episode to find out more!

Fed making BIG mistake, as Ukraine tensions hammer mood | MarketTalk: What’s up today? | Swissquote
Swissquote (in English)
Video news

Euro and pound: BURNING !

The FX markets kick off the week on an extremely chaotic note. Both the pound and the euro are being severely punished for the political decisions that are taken in the UK and in Italy respectively.

As expected, the far-right candidate Giorgia Meloni won a clear majority in Italy at yesterday’s election, with Brothers of Italy gaining more than 25% of the votes. And Meloni’s right-wing alliance with Salvini’s League and Berlusconi’s Forza Italia got around 43% of the votes: the terrible consequence of the pandemic, the war and the energy crisis.

The EURUSD has been shattered this morning. The pair dived to 0.9550.

But it’s almost worst across the Channel, if that’s any consolation. Investors really hated the ‘mini budget’ announced in UK last Friday. Investors were expecting to hear about a huge spending package from Liz Truss government, but the package has been even HUGER than the market expectations.

UK’s 10-year yield jumped more than 20% since last week, the FTSE dived near 2% and Cable tanked below 1.0350 in Asia this morning.

Elsewhere, the US dollar index took a lift, and the dollar index is just crossing above the 114 mark at the time of talking.

Gold dived to $1626 on the back of soaring US dollar.

US crude oil plunged below $80 per barrel.

The S&P500 fell to the lowest levels since this summer, whereas the Dow Jones fell below the summer dip.

Happily, the European equities are better bid this morning, but investors remain tense and worried.

Watch the full episode to find out more!

Euro and pound: BURNING ! | MarketTalk: What’s up today? | Swissquote
Swissquote (in English)