Sunday 27 February 2022

Week to Feb 25th

Russia invades Ukraine. Markets recover in hours.


As we mentioned last week, the primary driver of markets this week was the invasion of Ukraine by Russia, the first war on European soil since the Kosovo in 1999. Markets fell hard on Thursday morning and gold, oil and the dollar surged in classic form. However, the moves were quickly reversed, and SPX and NDX both ended the week up, and DJIA was flat. The dollar and yields were up overall, the latter not really reacting to the Ukraine issue. The RBNZ rate hike was priced in, and had no effect on NZD. Gold and oil both tracked the dollar.


The biggest index mover was Ukraine-sensitive DAX, down 3.16%. The top forex mover was GBPAUD up 1.91%. Bitcoin and Ethereum were flat, as was FANG.

Last week's AUDNZD long position made 0.08%, which means I am ahead 2.91% this year, with 4/7 (57%) wins. I think EUR is going to react to Ukraine, and so sell it against NZD. I am avoiding AUD as there is a rate decision statement.

Note we use Google Finance data for daily movements, listing UUP as a proxy for DXY. All references to ‘the dollar’ are based on DXY. The equity and index prices are now based on the cash close each day.

Next week sees a new month, and therefore NFP, which at 400k estimate is similar to last month's print. Ukraine is still expected to dominate the general headlines, although Australian and Canadian rate decisions and Aussie and Canadian inflation will have an effect in the forex area.

CALENDAR  (all times are GMT, volatile items in bold)

Monday February 28
23:50 Japan Ind Production (Sun)
23:50 Japan Retail Sales (Sun)
00:00 Aus TD Securities Inflation
00:30 Aus Retail Sales (p-4.4%)
13:30 Canada Current Account
14:45 Chicago PMI
21:30 Aus AiG Mfg Index

Tuesday March 1
01:00 China PMIs
01:45 China Caixin Mfr PMI
03:30 RBA Rate Decision/Statement (e0.1% hold)
07:00 Germany Retail Sales (p0%)
08:55 Germany Markit Mfr PMI
09:30 UK Markit Mfr PMI
13:00 Germany CPI (e5.3% p5.1%)
13:30 Canada Q4 GDP (p5.4%)
14:30 Canada Markit Mfr PMI
14:45 US Markit Mfr PMI
15:00 ISM Mfr PMI (e58.0 p57.6)
18:30 BoE Saunders speech

Wednesday March 2
00:30 Australia Q4 GDP (e0.5% p-1.9%)
08:55 Germany UnEmp Change/Rate
10:00 Eurozone HICP (CPI) (Core p2.3%)
10:30 DE10Y Bond Auction
13:15 US ADP (e328k p-301k)
15:00 BoC Rate Decision/Statement (e0.25% hold)
19:00 Fed Beige Book
20:00 BoE Cunliffe speech
21:30 Aus AiG Construction Index
22:00 Aus Commonwealth Bank Services PMI

Thursday March 3
00:30 Aus Imports/Exports/TB (TB p8.36B)
01:45 China Caixin Services PMI
08:55 Germany Markit Comp PMI
09:00 Eurozone Markit Comp PMI
10:00 Eurozone UnEmp Rate
12:30 ECB MPC Minutes
13:30 US Jobless Claims
14:45 US Markit Comp/Svcs PMIs
15:00 US Factory Orders
15:00 ISM Svcs PMI (e 61 p59.9)
23:30 Japan Jobs/UnEmp

Friday March 4
07:00 Germany Trade Balance
10:00 Eurozone Retail Sales (p2%)
13:30 US NFP/AHE/UnEmp (NFP e400k p467k)
15:00 Canada Ivey PMI

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