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Stocks swing, gold surges, oil tops $95 amid Ukraine tension, Fed policy

ukraine conflict

Asia markets are set to open lower following a volatile session on markets overnight, with the US warning of an “imminent attack” on Ukraine by Russia, while investors assess the US Federal Reserve’s Bullard’s latest comments on monetary policy. SPI futures are indicating a 0.9% drop at the start of trading for the S&P/ASX 200. The NZX 50 is 0.2% higher so far this morning.

US stocks

The Dow Jones Industrial Average fell 0.5%, the S&P 500 was down 0.4%, and the Nasdaq was flat.

The chipmaker, Nvidia shares rose 1.27% ahead of its fourth-quarter earnings on Thursday. Advanced Micro Devices was up 1.17%. Netflix gained more than 1%. Tesla rose 1.87%, but the EV maker shares are down by 37% from the January high at $1200.

Treasuries

Fed member James Bullard said the Fed should “front load” plans to remove the stimulus policy. Bond yield spreads narrowed, indicating more aggressive rate hikes could disrupt economic growth.

The 10-year US Treasury yield rose to 1.996 %, and the 2-year Treasury yield was up, to 1. 576%. With the rise in the short-dated bond yields outpacing the long-dated bond yields, the spreads are narrower, yield curves are flattened, potentially leading to a bond yields inversion, which might signal an economic recession.

Commodities

Gold future surged $US32 per ounce, to $US1,874.5 amid Russia-Ukraine tension. Silver rose US50 cents, to $US23.87 per ounce.

WTI crude oil topped $US95 a barrel at one point and closed 1.72% higher, to $US94. 95. The potential disruption in the supply chain amid the Russia-Ukraine crisis has been driving oil prices higher.

Currencies

USD strengthened against all of the other major currencies. Euro was down 0.35% against the greenback as the Ukraine tension causes geopolitical concerns in the region, with Russia calling for NATO not to allow Ukraine to join as a member.

Cryptocurrencies

Major cryptocurrencies were flat. Bitcoin has been hovering around $US42,000, and Ether is trading close to $US2900.


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