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MTrading Team • 2022-04-04

Traders remain positive despite Ukraine, China concerns while gold, BTC consolidate recent moves

Traders remain positive despite Ukraine, China concerns while gold, BTC consolidate recent moves

After an optimistic end to the week, Monday appears a positive start to the upcoming trading days. Yields stay high and push BOJ towards more buying of bonds, which indirectly fuels USDJPY.

Russia-Ukraine watchers are hopeful of a truce despite recent jitters in Mariupol and Bucha.

Australia’s inflation gauge surged the most since August 2020 in March, pushing AUDUSD amid firmer hopes of RBA action.

China’s covid conditions worsen and Evergrande also tries to derail the mood but hopes of more easing keep equities firmer in Asia, as well as in the UK.

Gold consolidates the previous week’s losses while ETH/USD retreats from a three-month high. Further, BTC/USD also pares some gains amid a lackluster session.

Following is the detailed performance report of the key financial assets:

  • BRENT OIL rebounds from 12-day low, up 0.80% intraday around $105.80.
  • GOLD remains mildly bid around $1,930.
  • USD INDEX stays on the way to 99.00, up 0.10% near 98.65 at the latest.
  • DOW JONES, NASDAQ and S&P 500 all performed better on Friday.
  • DAX drops 0.40% reaching 14,390 rate whereas FTSE 100 reaches 7,550 level, up 0.20% intraday.
  • BTC/USD remains downbeat around $46,200, ETH/USD also drops 0.55% to $3,505 rate.
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Optimism prevails over Russia-Ukraine diplomatic solution

Claims from Ukraine and Russia recently underpinned hopes of a peace agreement between Kyiv and Moscow, with eyes on a personal meeting between Ukraine President Zelenskyy and his Russian counterpart Putin. The news offers good support to the market sentiment and helps riskier assets like equities, commodities and Antipodeans.

It’s worth noting, however, that strong Treasury yields challenge the US dollar bears despite the latest pullback in the greenback gauge. The firmer bond coupons also push the Bank of Japan (BOJ) towards more easy money to defend the yield target, which recently got support from a senior political official.

Aussie data played its role to offer additional support to the AUDUSD prices but China’s covid conditions and Evergrande news probed the bulls.

Gold licks its wounds while oil prices improve amid softer USD and hopes of continuing geopolitical tensions even as Russia-Ukraine truce.

Asia-Pacific equities tracked Friday’s Wall Street performance and favored stocks in London and Brussels during the early hours.

Current trends

Risk-on continues with a slow grind but prices of crude and gold play different songs amid skepticism:

⏫ 🟢 Strong buy: DAX, FTSE 100, and BTC/USD

⏬ 🔴 Strong sell: DOW JONES, S&P 500

⬆️ 🟢 Buy: USD Index, ETH/USD, Nasdaq

⬇️ 🔴 Sell: Brent oil, Silver, Gold

Geopolitics to play their role amid a lighter calendar

Global market watchers should keep their eyes on the headlines concerning the Russia-Ukraine war, China’s coronavirus conditions and the oil deal talks with Iran for clear directions amid a softer start to the week. The mood, however, is likely to remain mildly positive and can help the riskier assets to remain firmer. It’s worth noting that cryptocurrencies may witness a pullback, ETH especially, as the bulls seem to have run out of steam.

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