Markets Lower As Putin Steps Up Violence
Equities markets are trading with a heavy tone across the European open on Tuesday. Following a more optimistic start to the week it seems that risk sentiment has soured following news of heavy bombing by Russian forces of Kyviv overnight. There had been hopes, expressed over the weekend, of a potential ceasefire to be agreed this week between Ukraine and Russia. While this might still prove to be the case, for now it seems that markets are assuming any such resolution will fail to materialise as risk assets continue to unwind. News flow around the conflict continues to be a rollercoaster with markets reacting neurotically to details as they come in, a theme which looks unlikely to alter near-term.
Looking ahead this week, the March FOMC will be the main focal point. The Fed is widely expected to lift rates by .25%. However, the bigger focus will be on the bank’s outlook and guidance. In particular, markets will be looking to see how the Fed judges the risks around the violence in Ukraine and how this will likely impact its own tightening schedule. Given the lift in energy prices and the potential for an ongoing rise in inflation, there are upside risks into tomorrow’s meeting. If the Fed does deliver a more hawkish set of forecasts and guidance, this will further dampen risk sentiment near term.
Technical Views
DAX
The rally off the 12462.59 level has seen the market bouncing back into the broken bear channel. For now, the recovery has run into resistance ahead of the 14170.79 level. However, with MACD and RSI turning bullish again, if price can hold above the 13672.31 level, near term focus remains bullish with the 14791.27 level the next upside marker to note.
S&P 500
For now, it seems the bearish trend in the S&P looks set to continue. Price has been trading lower in a clear bullish channel following the reversal from last years highs. The market is now turning lower once again from the latest failure at the 4221.25 level. With MACD and RSI both bearish, the focus is on a continuation lower towards a test of the 4062.25 level next.
FTSE
The rally off the 6818.3 lows in the FTSE has seen the market failing into a retest of the broken bull channel. Price is currently holding around that region for now. However, with both MACD and RSI bearish, the focus is on a further drop lower unless bulls can get back above the 7241 level near term.
NIKKEI
The breakdown in the Nikkei has seen the market trading below the longer-term bear channel, which price is currently holding beneath. For now, with indicators flattening, bearish momentum has been lost. However, unless bulls can quickly reclaim the 25595.3 level, the near term focus looks skewed towards lower prices.
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With 10 years of experience as a private trader and professional market analyst under his belt, James has carved out an impressive industry reputation. Able to both dissect and explain the key fundamental developments in the market, he communicates their importance and relevance in a succinct and straight forward manner.