Market update 28/02/2022
USD and JPY to outperform most “risk-on” currencies amid geopolitical stress – HSBC
In response to recent geopolitical newsflow, many currencies are behaving in a typical ‘risk-off’ fashion. Any claim to safe-haven status for the euro is side-lined for now, given the considerable downward pressure it faces. What’s more, the traditional safe-haven US dollar and yen should strengthen against the ‘risk-on’ currencies, irrespective of rates, for now, economists at HSBC report. Any claim to safe-haven status for EUR side-lined for now
“The EUR has been under considerable downward pressure, illustrating that its gradual transformation to a safe-haven currency still has some way to travel. The triggers for this current bout of risk aversion were a stern test of any safe-haven allure for the EUR, given the geographic proximity and Europe’s reliance on energy imports from the region.”
“The ‘risk-off’ playbook has unfolded, and it is not the time to take a more optimistic path yet. As such, the traditional safe-haven USD and JPY should strengthen against the ‘risk-on’ currencies, irrespective of rates for now.”
Gold advance as West heaps sanctions on Russia
Spot gold rose 1% to $1,907.08 per ounce, after gaining as much as 2.2% earlier in the session. U.S. gold futures advanced 1% to $1,907.10.
Gold has risen about 6% so far in February in what would be its best monthly gain since May 2021, after prices soared to an 18-month high of $1,973.96 last week.
"Gold bulls have fed off Europe’s worst security crisis in decades, turning the precious metal into the top-performing safe-haven."
Oil soars as Russian energy supply fears intensify
Oil prices jumped on Monday as Western allies imposed more sanctions on Russia and blocked some Russian banks from a global payments system, which could cause severe disruption to its oil exports.
Brent crude rose $4.82, or 4.9%, to $102.75 by 1028 GMT after touching a high of $105.07 a barrel in early trade.
The Brent contract for April delivery expires on Monday. The most active contract, for May delivery, was up $4.74 at $98.86.
U.S. West Texas Intermediate (WTI) crude was up $4.62, or 5%, at $96.21 after hitting $99.10 in early trade.
"Growing concerns about disruptions to Russian energy supplies are pushing oil and gas prices up sharply," said Commerzbank analyst Carsten Fritsch.
Ukraine raises $13 mln in crypto after crowdfunding appeal
Ukraine's government has raised cryptocurrency worth almost $13 million after posting appeals on social media for donations of bitcoin and other digital tokens, data from blockchain analysis firm Elliptic showed on Monday.
Ukraine's official Twitter account made the appeal for cryptocurrency donations on Saturday following the country's invasion by Russia, posting digital wallets addresses for tokens including bitcoin and ether.
Sources* Reuters, FXStreet.