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BOC hikes, Powell backs 25bp move

"After all, you only find out who is swimming naked when the tide goes out." - Warren Buffett

 

 

HEADLINES

 

 

  • Commodity currencies rally; Russian rouble firms in offshore market
  • Bank of Canada hikes interest rates, sets stage for more tightening
  • Fed's Powell backs quarter point March rate hike; open to bigger moves later
  • Gold rally cools as bond yields, stocks recover; palladium rises
  • Oil blasts through $110/bbl, as few alternatives seen to Russian supply
  • Russia ETF draws meme stock-like trading frenzy
  • GOLD Short Term: Downside favored

 

 

FOREX

 

 

Commodity currencies rally; Russian rouble firms in offshore market

 

Currencies of commodity-exporting economies rallied on Wednesday as oil and metal prices soared in the aftermath of stinging sanctions on Russia over its invasion of Ukraine, while the rouble widened its divergence between onshore and offshore trading.

The Russian currency closed Moscow trading at 106 per dollar after hitting a new low of 110, while in the interbank market, the currency jumped almost 10% in extended trade to below 100 a dollar.

 

Bank of Canada hikes interest rates, sets stage for more tightening

 

The Bank of Canada hiked interest rates for the first time since October 2018 on Wednesday and said they would need to go higher despite increased uncertainty following Russia's invasion of Ukraine, setting the stage for a further increase in April.

The central bank raised rates to 0.50% from a record-low 0.25%, as expected, and also said it would continue with the reinvestment phase of its bond buying program.

 

Fed's Powell backs quarter point March rate hike; open to bigger moves later

 

Powell said he will back a quarter point rate increase when the Fed meets March 15-16, effectively putting to rest debate over starting a post-pandemic round of rate hikes with a larger than usual half-point increase.

 

 

COMMODITIES

 

 

Gold rally cools as bond yields, stocks recover; palladium rises

 

Gold slipped on Wednesday due to an uptick in risk appetite and U.S. bond yields, while concerns over a supply crunch that may follow sanctions on Russia kept the price of auto-catalyst metal palladium near a seven-month peak.

 

Oil blasts through $110/bbl, as few alternatives seen to Russian supply

 

Oil surged relentlessly beyond $110 a barrel on Wednesday, extending its rally since Russia invaded Ukraine seven days ago, on expectations that the market will remain short of supply for months to come following sanctions on Moscow and a flood of divestment from Russian oil assets by major companies.

 

 

STOCKS

 

 

Russia ETF draws meme stock-like trading frenzy

 

The battered shares of Van Eck’s Russia ETF are attracting a surge of interest from traders and drawing comparisons to last year’s frenzy in so-called meme stocks.

Designed to track the performance of the MVIS Russia Index, the ETF has tumbled 65% over the last two weeks as Russia’s invasion of Ukraine and Western sanctions stir massive gyrations in assets linked to the country.

 

 

CHART

 

 

GOLD Short Term: Downside favored

Technical View: Short position below 1950. Target 1910. Conversely, break above 1950, to open 1960.

Comments: The pair remains under pressure. Further weakness favored.

Source: Trading Central
 

 

 

CALENDAR

 

 

*Times in GMT

 

 

Source: FX Street Economic Calendar


SOURCES

https://www.fxstreet.com/economic-calendar
https://www.reuters.com/business/finance/bank-canada-raises-rates-050-warns-russia-uncertainty-2022-03-02/
https://www.reuters.com/markets/europe/rouble-slides-stinging-sanctions-sky-high-oil-prices-hurt-risk-mood-2022-03-02/
https://www.reuters.com/markets/europe/gold-slips-dollar-firms-investors-focus-ukraine-conflict-2022-03-02/
https://www.reuters.com/business/energy/oil-jumps-3-choked-russian-supply-trade-finance-dries-up-2022-03-02/
https://www.reuters.com/markets/europe/russia-etf-draws-meme-stock-like-trading-frenzy-2022-03-02/