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Oil, gold spike on reports of nuclear plant shelling in Ukraine

construction worker with machinery

Gold and oil prices surged, US futures dived and the S&P/ASX 200 dropped as much as 1.5% just after midday AEDT after reports of shelling by Russian troops of Europe’s largest nuclear power plant that is situated in Ukraine. The news moved traders and investors towards significant risk aversion and safe haven demand with markets throughout Asia falling.

By the close of the day's session, the ASX 200 ended down 0.6%, with reports that fires at the nuclear plant were contained. For the week, the index was up 1.5%.

The rally for oil prices had stalled overnight as speculation increased that Iran will soon sign a nuclear deal with the US that will allow the country to export as much as 1 million barrels per day of crude, or around 1% of global supply. The country’s oil minister told agencies that Iran is ready to step up its crude exports once US sanctions are lifted.

But the war escalation by Russian troops poses questions as to whether it could bring NATO to get involved in Ukraine. The nuclear plant in Ukraine is reported to be on fire.

Non-farm payrolls data rolls out in the US tonight. CNBC reports that economists surveyed by Dow Jones expect growth of 440,000 jobs, and the unemployment rate to tick down to 3.9%. Hourly wages are projected to grow 5.8% year over year. Data released in February showed that the US economy added 467,000 jobs in January, well above the 150K forecast, while wage growth jumped more than expected. At the time, the dollar strengthened and US yields rose as markets lifted bets that the US Federal Reserve would tighten monetary policy after that month’s data was released.

This is the last jobs report before the next FOMC meeting, where the US Federal Reserve is expected to begin raising interest rates. Chair Jerome Powell said this week he is leaning towards a 25 basis points increase in March. Before the start of Russia’s invasion of Ukraine this month, analysts were forecasting a 50 basis point hike.

The Aussie dollar is stronger at US73.59c against the US dollar.

Bitcoin is $US41,370.

Gold is $US1939.58 an ounce.

Brent crude oil is around $US114.86 a barrel.

WTI crude oil is at $US111.44 a barrel.

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