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US stocks extend gains, oil reclaims $100, USD weakens further

US stocks

Asia markets are set to open higher following the third straight day rebound in the US markets as investors are digesting the Fed's tightening policy while assessing the Russia Ukraine war. Russia made the $117 million coupon payments to creditors, which also offers relief to the financial markets.  

Chinese stock markets also advanced for the second straight day after Beijing pledged to stabilize the financial markets. The Chinese Ministry of Commerce calls to further expand its high-level opening to foreign businesses.  The HSI jumped 7%, and the major mainland indices were all up between 1-3% on Thursday.

SPI futures are up 0.44%, pointing to a higher open in the Australian markets, and the NZX 50 was up 0.34% in the first hour of trading.

US and EU stocks

Both the Dow Jones Industrial Average and the S&P 500 were up 1.23%, and Nasdaq advanced 1.33%.

All of the 11 sectors in the S&P finished higher. Energy stocks rebounded sharply as oil prices climbed back to above the $100-mark. Both Occidental and Devon Energy were up more than 9%. The mega-cap tech stocks were mostly higher, with Amazon up 2.5%, Meta Platforms rising 1.9%, and Tesla climbing 3.7%. 


On the data front, the US jobless claims continued to drop for the second week, indicating an ongoing tightening labour market. The US mortgage rate soared to above 4% for the first time since 2019.

European stocks finished mixed, with Euro Stoxx 50 down 0.1%, DAX falling 0.36%, and CAC 40 advancing 0.36%. The FTSE 100 climbed 1.28%.

Treasuries

The 10-year US Treasury yield was flat at 2.19%, and the 2-year Treasury yield was unchanged at 1.93%. Bond markets have been reflecting a very concerning economic outlook, with a flattening yield curve, projecting for a foreseeable recession.

The EU bond yields were also little changed. Germany 10-year Bond Yield was at 0.39%, and the France 10-year Bond Yield stayed at 0.83%. The UK 10-year Gilt yield was down to 1.56%.

Commodities

Oil prices jumped overnight as a Kremlin spokesman denied the news for solid progress in the peace talk with Ukraine, which sparked renewed concerns over a shortage of supply.

The crude futures were up more than 8%, with WTI rising to US$103.70 per barrel, and the Brent crude up to $106.98 per barrel.

Gold futures also advanced on a falling dollar, up $32, to $1,941 per ounce. Silver rose 3.4%, to $25.54 per ounce.

Currencies

USD weakened further against most of the other major currencies. AUD jumped on a strong jobs number, up 1.2% against the greenback. NZD was also strengthened by optimism for a forward border reopening plan by the government, up 0.8% against the USD. The British Pound was flat after the ECB increased interest rates by 25 basis points for the third time in a row, to 0.75%, while holding a dovish tone regarding the geopolitical tensions and warning inflation could overshoot 8%.EUR climbed higher.

Cryptocurrencies

The cryptocurrencies were mixed, with Bitcoin down 1.25%, to around US$40,700, and Ethereum up 1.41%, to above US$2,800 in the last 24 hours.

The crypto markets somewhat see benefit from the Ukraine crisis. Ukraine President Volodymyr Zelenskyy signed a bill to legalize the crypto sector due to the mounting donations into the country by crypto transactions. There was news that Russia also uses cryptocurrencies to hedge rouble devaluation. Bitcoin and Ethereum were up 19% and 22% respectively from the lows since the war started on February 24. 

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