S&P500
The US market rallied again on optimism over the Russia-Ukraine conflict.
The major US indices rose: the Dow Jones went up 1%, the NASDAQ added 1.8%, the S&P500 increased by 1.2%.
Key news: The Russian ruble continued to strengthen significantly with the dollar and euro trading on the MICEX at 84 and 98 rubles respectively. The ruble added another 5% yesterday due to the improvement in the Russia-Ukraine conflict.
Asian markets on Wednesday morning: Japan's indices fell by 0.9%, while China's indices rose by 2.5%.
Yesterday, oil prices were down nearly $5 due to news on the Russia-Ukraine conflict. However, they held steady at Monday's levels. Brent crude oil was trading at $111. Russia demands "unfriendly" countries to pay for its oil and gas in rubles. Therefore, oil prices are affected by this situation. The G7 countries are opposing this form of payment. Thus, the issue has not been resolved yet.
The outcome of the Russia-Ukraine conflict has been reported. First, Russia will withdraw its troops from Ukraine's capital Kyiv and evidently from the northern city of Chernihiv. This news was announced by the Russian Ministry of Defense as a move towards a ceasefire. Secondly, the Russia-Ukraine peace talks in Turkey showed positive results. The parties agreed on Ukraine's neutral status and rejection of foreign troops and military bases on its territory after the end of the conflict. Moreover, the future status of Crimea will be decided within 15 years of bilateral negotiations and Ukraine will not try to resolve the Donbass issue by force. In this case, Russia is obliged to withdraw its troops from Ukraine and end the ceasefire. However, a ceasefire agreement has not been signed yet. Therefore, the Russia-Ukraine conflict and fighting is likely to continue in the east and south of Ukraine.
According to Western media reports, Russian troops continued to shell residential buildings in Ukraine after the peace talks ended yesterday. US Secretary of State Antony Blinken said that the US would respond only to the Kremlin's actions.
Russia launched a buy back offer on its $2 billion Eurobonds maturing in 2022 in exchange for rubles.
The S&P500 is trading at 4631, the range is 4590 - 4670
US oil inventories fell by 3 million barrels during the week, nearly 2 times surpassing the forecast.
Tomorrow, the US PCE inflation report for February will be released. Today, the ADP report on employment in the US is expected to be published. According to the forecast, the employment rate was likely to increase by 500,000 new jobs in March.
The USDX is trading at 98.0, the range is 97.70 - 98.30. The dollar fell by 1% during the 24 hours. Following the dollar, gold declined by 1.5% due to improvement in the Russia-Ukraine conflict. Yesterday, the euro rose dramatically to 1.1115 against the dollar for the same reason. However, it is evident that a new escalation of the conflict is quite likely as a ceasefire agreement has not been signed yet.
The USDCAD is trading at 1.2480, the range is at 1.2400-1.2580. The pair dropped yesterday due to the dollar's decline
Conclusion: The US market is still bullish. However, a strong pullback is quite possible owing to a new wave of negative news on Ukraine and a possible inflation.