Recovery losing momentum

It’s been a relatively slow start to trading in equity markets as we approach the end of the week, with stocks losing the momentum that’s driven the strong recovery in recent weeks.

The recovery has arguably been overdone considering the invasion of Ukraine is ongoing and commodity prices are at sky-high levels and still prone to surges. But the fact that Ukraine and Russia remain in negotiations seems to be enough to keep investors on board.

The threat of very high inflation and rapid rate hikes isn’t proving much of a deterrent either which is interesting after more than a decade of ultra-low rates in both cases. Again, this may change as we see more evidence of the economic consequences and as central banks both raise rates and reduce their balance sheets but for now, markets are holding up.

MOEX manipulated higher as trading resumes

Russian stocks restarted trading on Thursday and it’s safe to say this is no longer a normal functioning market. Trading ceased on stocks for almost a month after they plunged in response to Western sanctions against Russia for its illegal invasion of Ukraine.

Authorities are going to great lengths to manipulate the market and prevent another devastating plunge and their efforts are working, for now. The MOEX rallied more than 4% in shortened trade thanks to a combination of heavy government buying and bans on short-selling and foreign sales. There is nothing normal, functional, or sustainable about the Russian market right now, they’re simply buying time.

Bitcoin sights set on USD 45,500

Bitcoin has been quietly creeping higher in recent weeks and was relatively unaffected by yesterday’s bout of risk aversion. It held above USD 40,000 during the pullback earlier this week and is holding onto gains once more as it eyes the next big test around USD 45,500. It’s failed here repeatedly before but further improvements in risk appetite in the markets may see it over the line.

For a look at all of today’s economic events, check out our economic calendar: www.marketpulse.com/economic-events/

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.

Craig Erlam

Craig Erlam

Senior Market Analyst, UK & EMEA at OANDA
Based in London, Craig Erlam joined OANDA in 2015 as a market analyst. With many years of experience as a financial market analyst and trader, he focuses on both fundamental and technical analysis while producing macroeconomic commentary. His views have been published in the Financial Times, Reuters, The Telegraph and the International Business Times, and he also appears as a regular guest commentator on the BBC, Bloomberg TV, FOX Business and SKY News. Craig holds a full membership to the Society of Technical Analysts and is recognised as a Certified Financial Technician by the International Federation of Technical Analysts.
Craig Erlam
Craig Erlam

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