The eye of the hurricane

Equity markets settle down

A sense of calm has returned to Asia this morning, thanks to the news headline tickers staying quiet about anything Ukraine, energy or otherwise commodity-related. Overnight, US markets played catchup to yesterday morning’s carnage in Asia, but although Wall Street had an ugly day, they didn’t add anything new to the story.


That state of affairs is unlikely to last though and one senses we are in the eye of the hurricane, a period of calm before the winds return once again. Price action in the nickel market overnight, suggests a sense of panic and the squeeze on commodity supplies is going nowhere soon. I qualify the word “calm,” though. Brent crude is 2.40% higher in Asian trading today, but when set in context versus yesterday’s volatility, that it practically comatose.


Assisting the sense of calm is a very quiet data calendar in Asia today. In Australia, NAB Business Confidence for February rose sharply to 14 from 4 previously, showing no geopolitical nerves. The Lucky Country, of course, is better placed than most in the current climate, being a major exporter of just about every commodity that the world desperately wants. Japan’s average earnings rose by 0.90% in January YoY, higher than expected. The number is flattered by a new basing year and annual salary increments.


Looking ahead, Eurozone Employment is unlikely to move the needle, European markets being completely at the mercy of geopolitical developments. China Inflation tomorrow will remain benign while US Jolts Job Openings, and US Inflation on Thursday, will reinforce a Fed hike next week. The real focus will be on how many Fed hikes we will get this year and whether the Ukraine situation and its knock-on effects will cause the Fed to blink on hikes. Ukraine derived volatility aside, markets are looking like they are now moving into a holding pattern ahead of next week’s FOMC meeting from a data perspective.

This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

Jeffrey Halley

Jeffrey Halley

Senior Market Analyst, Asia Pacific
With more than 30 years of FX experience – from spot/margin trading and NDFs through to currency options and futures – Jeffrey Halley is OANDA’s senior market analyst for Asia Pacific, responsible for providing timely and relevant macro analysis covering a wide range of asset classes. He has previously worked with leading institutions such as Saxo Capital Markets, DynexCorp Currency Portfolio Management, IG, IFX, Fimat Internationale Banque, HSBC and Barclays. A highly sought-after analyst, Jeffrey has appeared on a wide range of global news channels including Bloomberg, BBC, Reuters, CNBC, MSN, Sky TV, Channel News Asia as well as in leading print publications including the New York Times and The Wall Street Journal, among others. He was born in New Zealand and holds an MBA from the Cass Business School.
Jeffrey Halley
Jeffrey Halley

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