FX.co ★ US stock market on March 11, 2022

S&P500

The US market declined on Thursday but gained by the close.

The Dow lost 0.3%, the NASDAQ fell 0.9%, and the S&P 500 tumbled 0.4% on Thursday.

In Asia, China's stock index plunged by 1.5%, Japan's fell 2%.

Oil seems to be losing momentum after Wednesday's strong fall of around $20. It made an attempt to rise on Thursday, but failed to hold on to the gains and closed with a fall. Brent is trading at $109. An emergency meeting of the G7 was held yesterday on the issue of the sharp rise in oil prices. However, it was only decided to gradually reduce oil purchases from Russia. Perhaps the fall in oil is due to sales of oil from developed countries' reserves, as previously promised.

Gas on the ICE exchange in Europe also fell to $1,500 per barrel.

The ECB decided at a meeting yesterday to speed up the completion of two asset purchase programmes. A programme related to the pandemic will be completed as early as March. The second liquidity injection programme will be halved to €20bn a month as early as June. The ECB left the rate at 0%, saying it would not raise the rate until it had fully completed its liquidity injection programmes.

The S&P 500 trades at 4,259 and is expected to be in the range between 4,230 and 4,290.

The main US market index declined yesterday. However, the market actually fell sharply at the opening, but then closed the rest of the trading hours with gains.

The US inflation report for February showed a new record inflation rate of +7.9% p.a. after +7.5% in January. Biden blamed Russia for the price increase, but of course this is wrong. The rise in inflation in the US began back in April 2021, long before the current Russia-Ukraine-West crisis. Of course, Western sanctions against Russia and the risk of Russian oil and gas supplies being cut off have pushed oil prices to nearly $130 per barrel. The cost of gas has also risen by $2,000 to $3,000. This has contributed to higher inflation. As a result, the Fed is bound to raise rates as early as March 16 and will continue to do so until inflation starts to fall towards the Fed's target of 2.5%.

Markets are calming down a bit regarding the Russia-Ukraine crisis, but there is no real improvement so far. Yesterday, foreign ministers Lavrov and Kuleba held talks. The result was negative. Even a ceasefire could not be agreed. Analysts predict a possible new sharp escalation in the next days/week, a possible attempt to encircle Kiev and/or an attempted assault. The humanitarian crisis in Ukraine is escalating. According to the UN, the number of refugees has already reached 2.3 million. Half of Kiev's population has already left, up to 1.5 million people. The UN has stated that the number of civilian deaths is at least 2,000, not counting several thousand military casualties on both sides. At the same time, there has been no significant change in the conflict for about a week now, i.e. so far a positional phase with a tendency to go into a protracted state.

USDX is at 98.50 and is likely to trade in the range between 98.20 and 98.80. The dollar gained markedly on Thursday after a strong decline on Wednesday. Investors were expecting significant progress in the Russia-Ukraine negotiations, but this did not happen. So, the dollar rose again as a defensive asset.

USD/CAD trades at 1.2770 and is seen moving in the range of 1.2650-1.2900.

The pair is still waiting for some certainty on the dollar and oil.

The US market has the potential for a good rally. However, possible new bad news from Ukraine could again lead to a wave of declines.