S&P 500
The US market kicked off the new trading week with gains.
Major US indices advanced: the Dow Jones Industrial Average added 0.3%, the NASDAQ Composite gained 3%, and the S&P 500 index rose by 0.7%.
The Russian ruble continued its strong rally. The dollar/ruble and the euro/ruble pairs on the MICEX traded at 89 and 96 rubles respectively. The ruble is being supported by the Kremlin's decision to seek payment in rubles for gas sold to "unfriendly" countries. However, this issue is in the stage of a heated debate. Yesterday, the G7 countries said that paying for Russian gas in rubles would be unacceptable. They believe that Russia's demand constitutes a breach of contract. The Kremlin, in turn, said it would not supply gas to Europe for free.
Yesterday, oil prices fell sharply, losing 6 dollars, or about 6%. Brent crude oil traded at the level of $109 per barrel on Tuesday morning. Oil prices declined after it became clear that the West was not ready to impose a ban on oil imports from Russia (except for the US, but it is not a major buyer of Russian oil).
The new round of two-day negotiations between Ukraine and Russia will be held today in Turkey.
S&P 500: 4,575. Trading range: 4,530 - 4,610
In the United States, government bond yields and the stock market are rising at the same time. This usually occurs in a strong bull market. However, if the Fed raises interest rates - which is inevitable with the inflation rate of 7% or above - bond yields will edge higher and the market will stop rising. Even now, prices do not seem as attractive as in early March. Therefore, a strong pullback is highly likely.
This week's macroeconomic calendar includes a new report on inflation in the US to be released on Thursday, March 31.
USDX: 99.00. Trading range: 98.70 - 99.30.
The US dollar is consolidating below one-year highs but is about to break above it.
USD/CAD: 1.2505. Trading range: 1.2450 - 1.2600. The pair tried to gain strong upside momentum yesterday but faced a sell-off.
Conclusion. Only a breakthrough in Russia-Ukraine talks such as a ceasefire could act as a strong driver for markets. However, such a scenario is unlikely.