Risk trends bounce ahead of a summit between US President Joe Biden and Russian counterpart Vladimir Putin
US stocks fell on Friday as the Russia-Ukraine conflict continues to push risky assets lower across the board. The Dow Jones Industrial Average shed 0.7%, the S&P 500 lost 0.7%, and the Nasdaq Composite retreated 1.2%. The benchmarks each lost more than 1% last week.
On Monday, however, US equity futures turned higher, while Asian stocks trimmed intraday losses on a report that a proposal for a summit between US President Joe Biden and Russian counterpart Vladimir Putin has been accepted by both sides. As such, China’s Shanghai Composite and South Korean Kospi finished just below the opening levels. Meanwhile, Japan’s Nikkei 225 fell 0.78% after the data showed that the country’s manufacturing PMI dropped from 55.4 to 52.9 in February, below the expectation of 55.0.
Meanwhile, the dollar came back under selling pressure after another failed attempt to overcome the 96.00 figure earlier in the day. As risk sentiment had improved, the safe-haven demand for the greenback abated, pushing the euro towards the 1.1400 figure that has been capping further gains so far. Later in the day, PMI data could affect short-term dynamics in the EURUSD pair, but in a broader picture, geopolitics will continue to set the tone anyway.
Elsewhere, gold prices climbed to late-May highs around $1,908 earlier in the day before retreating below the $1,900 figure in recent trading as risk sentiment has improved. Despite some profit-taking, the precious metal could regain the upside momentum to notch fresh multi-month tops in the short term, as geopolitics will likely continue to support demand for the bullion. At this stage, the XAUUSD pair needs to hold above the $1,885 region in order to stay afloat and refrain from a deeper bearish correction.
