The long-waited month for the year 2022 has come, and this week also happens to hold most of the major news for the month.
We will witness this week, big movements on the major indices, and in specific Metals and Energy commodities.
The focus will be mainly on the Russian/Ukrainian discussions, OPEC + meeting on Wednesday, ADP non-farm and official NFP on Wednesday and Friday consecutively, and Powell’s testimony between Wednesday and Thursday.
Oil prices have been surging (Figure 1) ever since most economies started easing pandemic restrictions. However, with the current political turbulences occurring all around the world, we saw another bullish momentum to the upside on Crude and Brent Oil prices, both breaching the 100 dollars psychological levels. Eyes will be at the OPEC+ meeting which will take place on Wednesday the 4th of March 2022. In case the organization doesn’t change its mind regarding the increase of Oil supply globally, this might further trigger bulls in the market.
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Figure 1 : Source TradingView WTI
On another hand, Powell’s testimony will be a cruel one, especially after his last testimony which showed that the federal reserve will control the inflation rates. The Federal Reserve is currently facing two decisions, either increase interest rates for 50bps or even more to fight the increase in inflation prices, consequently leading to potential decreases in the U.S. stock market, or increase interest rates by not more than 25bps, which is already priced in the market, which might trigger indices bulls.
Adding to the above, we also have the Non-Farm Payrolls (Figure 2 ) for the month of February 2022. In normal market situations, the NFP has a major effect on the market and in specific U.S. indices, the Dollar index with opposing currencies, and Gold. However, given the current external variable, the world is facing, the movements might be already priced in after Powell’s testimony.
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Figure 2: Source, Forex factory, NFP History
Last but not least, the Ukrainian president Mr. Volodymyr Zelenskyy pushed for the urgent ascension to the European Union earlier last night, also urging the banking system to cut Russia from the SWIFT payment system.
As mentioned previously, all eyes will be centered on this week’s headlines starting today, given the different scenarios each event holds for the markets.
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