Investors continue to stay alert amid the ongoing geopolitical tensions
US equity markets plunged overnight, with technology stocks leading losses. Investors were unsettled as Biden said once again there was a high risk that Russia would invade Ukraine. On the data front, US initial jobless claims arrived at 248,000 versus 219,000 expected, February Philly Fed index came in at +16 versus +20 expected, while January housing starts arrived at 1.638 million versus 1.70 million expected. Meanwhile, Feds Bullard said the central bank was missing the inflation target by more than 300 basis points. As a result, the S&P 500 fell 2.1%, the Dow Jones lost 1.8%, and the Nasdaq was down 2.9%.
Today in Asia, however, investor sentiment has improved somehow, with major regional indexes trimming early losses after reports that United States Secretary of State Antony Blinken has accepted an invitation to meet with Russia’s Foreign Minister Sergey Lavrov. The meeting is expected to take place next week. Japan’s Nikkei 225 was down 0.4% after the data showed that the national core CPI grew 0.2% year-on-year in January. China’s Shanghai Composite edged up 0.66%. Despite the latest bounce in risk trends, investors continue to stay alert amid the ongoing geopolitical tensions.
In currencies, the dollar continues to trade in a mixed manner, staying mostly under pressure despite the persisting geopolitical risks and hawkish signals from the fed officials. The USD index struggles to regain the 96.00 figure these days as sellers reemerge on local rallies. Against this backdrop, EURUSD has settled in a tightening range, now limited by the 100- and 20-DMAs. Of note, the euro lacks the momentum to get back above the 1.1400 level despite a relative weakness surrounding the greenback, suggesting the downside risks continue to persist in the near term.
In other markets, the bitcoin price plunged dramatically on Thursday to get back below the 20-DMA for the first time since early February. The BTCUSD pair extended losses to the $40,000 figure that has been capping further losses so far. The coin has settled around $40,700 on Friday, struggling for direction after a sell-off. Should bitcoin manage to hold above the psychological support in the short term, a bounce back above the mentioned moving average could be expected.