Stock Markets Claim Gain While Awaiting Fed Policy Decisions, Oil Reacts to Ukraine Crisis

Market Trades On

While waiting for a decision announcement after the Federal Reserve meeting on needed monetary policies, global stock markets have stepped up their gains while the US dollar hit a flat note all through. On the other hand, the global oil market surprisingly rose in the direction of a 7-year high as tensions intensified in Eastern Europe.

The Federal Reserve’s policy is due to be updated at 19.00 GMT following its 2-day brainstorming session to regulate the market and hold up the dollar. The initial rate increment is expected in March but the market is already envisaging additional three increases, one each for the remaining quarters, before the end of the year.

Morgan Stanley Capital International (MSCI) increased by 0.32%. American equities had a more positive outlook but S&P Futures went up by 1.01% following the index’s loss of 1.22% in the earlier trading session.

Europe’s shares on the other hand gained by 1.47% with the British FTSE 100 gaining 1.38% in value.

American shares had last week as their worst week since 2020, while the Morgan Stanley Capital International (MSCI) index is well on its way to its highest monthly decline since COVID-19 began to have an effect on the stock market in March 2020. Some analysts with Goldman Sachs however think equities haven’t got to a dangerous level just yet.

A Senior Macro-Strategist with Nordea Asset Management, Galy Sebastien, has shared his opinion that with the latest market volatility, he expects that the Federal Reserve will be very careful over the pace and timing of reducing the balance sheet. He feels such will be a welcome development by the market.

On Russia and Ukraine

The heating up polity in Eastern Europe as a large number of Russian troops and military gear is moved to the border with Ukraine have also added their part to the non-risk-loving environment for investors.

President Biden had announced on Tuesday that he was going to take into consideration sanctions on the person of President Putin if Russia goes ahead to invade Ukraine. Other Western leaders have also pitched up military readiness, and are making plans to save Europe from possible energy cuts from Russia.

American crude oil price increased by 0.27% to hit $85.82/barrel after it almost got to $88 in the outgone week. Brent crude on the other side went up by 0.44% to reach $88.57/barrel.

The US dollar index held out firmly at 96.08 towards key fiat currencies, but the Euro was down at $1.1286, almost at a month’s low.  

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