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/

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