WEEK AHEAD: MARCH 7

Short Description

Euro sold on Russian sanctions

Video Script

Massive new sanctions on Russia are adding to the huge volatility in markets- including a 9-year high for oil prices, the euro dropping to its lowest since early 2020 and a big bounce in the Nasdaq. In the week ahead there is also an ECB interest rate decision and US inflation data. Stay tuned!

 

Hey guys, I’m Rich and a very warm welcome to the week ahead, where I analyse price trends and preview upcoming market events.

 

The harsh new sanctions on Russian people and businesses proved to be the biggest mover of markets over the past week.

 

In forex markets the Russian rouble was the obvious loser, crashing to record lows over 10 to the US dollar. The euro dropped to its lowest since the first half of 2020 as European businesses, including oil companies BP and Royal Dutch Shell and shipping container company Maersk, withdrew from Russia to avoid being sanctioned. That cuts off a big source of revenue from Russia - which could act as a drag on the European economy.

 

Locking Russian banks out of the SWIFT payment system also meant Russia could not easily sell its oil & gas, creating a supply shock that sent Brent crude oil to its highest in 9 years.

 

Yet despite all the uncertainty, investors took the opportunity to buy the dip in tech stocks and the Nasdaq index, which jumped out of bear market territory. Investors appear to be concluding, for now at least, that war in Eastern Europe won’t heavily affect most US corporations.

 

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So let’s round things off with the economic calendar. There is an update to Q4 GDP data from Europe and Japan at the start of the week with China also reporting inflation but the biggest movers are likely to be on Thursday via the ECB meeting and US February CPI data. European inflation jumped to 5.8% - a fresh record high in February - which is building pressure on the ECB to speed up its policy tightening to see off a big jump in the cost of living for Europeans. Still, expectations are for no rate hike this time around. US inflation is expected to have reached another 4-decade high over the past month, exacerbated by the big jump in the price of oil as well as other basic commodities.

 

Right thanks everyone, good luck trading this week and make sure to click on subscribe so you don’t miss the next episode of the week ahead.