– It was another night of risk on with the Aussie dollar, euro and yen higher along with stocks in the US and Europe while gold was under pressure again, even though Vladimir Putin was at his belligerent best in a speech to the Duma last night.
– So it is interesting that markets are simply not concerned that, having won this battle without a any resistance, Putin won’t try something else. Indeed, markets also appear unconcerned about the Ukrainian soldier who was killed last night and the edict that the Ukraininan defence force has given for soldiers to fight back if necessary.
– At the close, the Dow rose 89 points or 0.55% to 16,336, the Nasdaq was 1.24% higher while the S&P 500 rose 13 points to 1,872 for a gain of 0.71%.
– In Europe, stocks were higher across the board with the FTSE up 0.56%, the DAX 0.68% and the CAC up 0.96%. In Milan, stocks rose 0.86% while in Madrid they rose 0.76%.
– Locally on the ASX, the March SPI 200 contract is up 14 points to 5361, so stocks look set to enjoy another good day.
– On Currency markets, the tale of woe for the US dollar continues with weak data in Germany and the EU in the form of lower-than-expected ZEW surveys failing to dent the euro’s rise. It sits at 1.3931 this morning. Likewise, the yen is stronger again with USDJPY down (yen stronger) to 101.39 again this morning and at risk of a big move lower. Sterling didn’t seem to like the moves at the BoE and is down at 1.6587 while the Aussie is closing in on resistance, sitting at 0.9124 this morning.
– On Commodities, Gold sits at $1,355.64, down 1% on the day as the fear washes out. Copper is still at $2.99 lb but Nymex crude has leapt 1.51% to $99.56. On the Ags, it was situation usual as volatility reigns. Corn was 1.51% higher, Wheat rose 2.67% and Soybeans rose 1.90%.
On the data front today, we have the Westpac leading indicator of growth in Australia and then Japanese trade before the BoE minutes tonight. At 5am AEDT tomorrow it’s the FOMC decision.
Here is Ric Spooner’s Stock to Watch Today
Ukraine kept Newcrest inching higher over the past couple of weeks but the rally looked tentative. New highs in price were not validated by the Relative Strength Index. This was making lower highs and diverging with price.
Yesterday, traders decided the music had stopped. Newcrest gapped under trend line support and went on with the job, breaking under the 20 day moving average. It closed on its low and down 7.6%. Although yesterday’s move was a big one, it follows a rally of 80% since December. A deeper correction in Newcrest now looks possible even if it takes some time to unfold.
Ric Spooner, Chief Market Analyst CMC Markets