European markets finished higher on Monday despite Ukraine accusing Russia of war crimes, more potential sanctions targeting Russia, and rising oil prices. In Europe, the session generated relatively low trade volume, with very limited initiatives in view of a still very uncertain international context.
Some key data from Monday’s trading session:
- CAC 40 = +0.70%
- DAX 40 = +0.50%
- Euro Stoxx 50 = +0.83%
- Dow Jones = +0.30%
- Nasdaq = +1.90%
- S&P 500 = +0.81%
- Oil = around $107 a barrel
- Gold = around $1,931 the ounce
- EUR/USD = above 1.0967
- GBP/USD = around 1.3113
- AUD/USD = above 0.7547
- USD/JPY = above 122.78
- USD/CAD = above 1.2489
Nasdaq gains around 17% since its mid-march low level
The bounce back of the tech-driven American index has been more impressive than the other American benchmarks. While the Nasdaq gained around 17% since its lowest level reached this year last March, the S&P 500 and the Dow Jones are respectively up about 13% and 10%.
Yesterday, the Nasdaq was driven by Twitter’s surge (+27%) that came after the news that Elon Musk had taken a surprisingly large stake in the social media platform – he bought about 73 million shares of Twitter stock, which represents a bit more than a 9% stake.
Other technology shares were recently heavily bought by investors, as they were really pushed aside during the first quarter of 2022 – one reason was higher borrowing costs, which always weighs on tech companies.
The EUR is losing ground, as new sanctions on Russia might come into play
While Moscow’s forces are accused of killing civilians in the Ukrainian town of Butcha, European leaders are increasingly in favor of new sanctions against Russia, with mounting pressure to ban energy imports from Russia, especially gas, oil, and coal. The next round of talks should be held on April 6th.
The EUR/USD was trading lower on Monday, with the currency pair struggling to remain above the $1.1000 mark. All this negative news about the situation between Ukraine and Russia, as well as soaring energy prices, will likely put downward pressure on the pair. Moreover, the dollar closed yesterday with investor expectations of rapid interest rate hikes in the United States this year.
Focus on the FOMC minutes
Market participants will closely monitor the March Federal Reserve’s minutes to gauge FOMC member appetite for upcoming high interest rate hikes (a half percentage point hike rather than a quarter percentage point one). They will also watch out for any details about the Fed’s plan about shrinking its balance sheet.
What could trigger higher volatility later on this week?
On Tuesday
- Holiday in Hong Kong / Chinese markets
- RBA interest decision
- UK Composite and Services PMI
- US Exports/Imports
- Canadian trade balance
- US Services and Manufacturing ISM PMI
- Economic and Financial Affairs Council in Europe
On Wednesday
- US Crude Oil Inventories
- FOMC minutes
- Australian trade balance
On Thursday
- ECB Publishes Account of Monetary Policy Meeting
- US Initial Jobless Claims
- Australian RBA Financial Stability Review
On Friday
- Employment change in Canada
