Market Update – March 18/2022

Written by Stuart Cowell

The BOE raised rates as expected by 25 bps to 0.75% but were less clear about next steps, strong US data (Claims, Housing & Phily Fed Index) helped US stocks (+1.25) to close higher (best 3-day gain since 2020) again as the USD cooled and Yields & Oil rallied (no immediate breakthrough in ceasefire talks).  Overnight  No change from BOJ  but JPY Inflation finally perking up. Asian stocks positive (Nikkei +0.65%). Japan & Australia added sanctions, Biden to call XiPutin talked to ErdoganBlinkin said “war crimes have been committed in Ukraine”.

  • USD (USDIndex 98.12). Tested to 97.70 yesterday as weekly decline continues.   
  • US Yields 10-yr up to 2.192% on close – down to 2.178% now.
  • Equities – USA500 +53.8 (+1.23%) and over 4400 to 4411. US500 FUTS flat at 4385 now. Tech & Fin rallied (FB & AMZN +2.0%, TSLA +3.73%, Occidental + 9.47%) and Berkshire Hathaway A-Shares breached $500,000 each! 
  • USOil – Rallied back over $100.00 yesterday. to test $104.80 (200HR MA) now.  
  • Gold – rallied to test $1950 yesterday, from Wednesdays flirt with $1900, trades at $1934 now.     
  • Bitcoin holds the break of $40,000 yesterday, trades at $40,600 now. 
  • FX markets – EURUSD back to 1.1078, unable to hold breach of 1.1100, USDJPY testing 119.00 & new 5-year highs at 118.85 and Cable having spiked over 1.3200 pre- BOE yesterday back to 1.3150 now, from 1.3100.    

European Open – The June 10-year Bund future is down -5 ticks, while US futures are posting slight gains.  Gilts benefited yesterday from the BOE’s “dovish-hike”, but after the initial move lower in yields, we could see some consolidation today. The FTSE 100 futures is posting modest gains, after local markets got a boost from a drop in Sterling yesterday. The DAX is fractionally lower this morning as stagflation concerns make a come back.

Today – US Existing Home Sales, CBR Policy Announcements, Quad Witching, Speeches from Fed’s Barkin, Bowman & Evans. Call between US President Biden and Chinese President Xi.

Biggest FX Mover @ (07:30 GMT) AUDJPY (+0.52%) Rally continues after another big move yesterday from 84.60 lows Tuesday to test 88.00 now. MAs aligned higher, MACD signal line & histogram strong but cooling, RSI 73, OB but rising, H1 ATR 0.150, Daily ATR 0.980.

About the author

Stuart Cowell

With over 25 years experience working for a host of globally recognized organisations in the City of London, Stuart Cowell is a passionate advocate of keeping things simple, doing what is probable and understanding how the news, charts and sentiment work together to provide trading opportunities across all asset classes and all time frames.

Leave a Comment