US Open: Bullard’s projections suggest Fed’s work is almost done, China-Russia ties, RBNZ hikes, Oil remains heavy, Gold edges higher, Bitcoin softens ahead of Fed Minutes

US stock turned positive after Fed’s Bullard stated that markets might be over-pricing US recession risk.  Bullard said his projections for rates are to reach 5.375%, which implies 75 bps more in rate increases.  Bullard is one of the more hawkish members, so if he thinks we only have a little ways to go here, the peak in rates might be properly priced in.  The disagreement between the Fed and markets on how high rates to go might be over and that could provide a tentative boost for stocks.


China’s top diplomat, Wang Yi said China is willing to deepen ties with Russia. Wang is expected to meet President Putin on Wednesday. China is well aware that more sanctions could be coming their way. The West is concerned China could be providing weapons to Russia.  China has continued to deny claims that they are supporting Russia with weapons.

Russia President Putin’s comments on China emphasized that ‘everything is progressing, developing’. It appears Putin is confident that whatever extra Western sanctions come towards China won’t derail their relationship.   De-globalization is not going away anytime soon and that ultimately should prove to be very inflationary.


The New Zealand central bank (RBNZ) raised its key rate by a half-point to 4.75% and kept its forecast for it to peak at 5.50%.  Rates are at 14-year high after the downshift 50 bps rate rise.  They noted a consideration for a 75-basis point increase, but not a quarter point hike.

RBNZ Governor Orr still expects a recession over a 9–12-month period, which means they expect growth to take  a big hit as policy gets even more restrictive.


Crude prices pared losses after interruptions with the Caspian Pipeline Consortium could make Kazakhstan curb output.  The CPC terminal is vital for taking oil from Kazakh and Russian fields and bad weather has stopped it from loading tankers on February 19th.

Oil is still feeling heavy as energy traders anticipate a hawkish Fed will contemplate larger rate hikes that will likely send the US economy into a recession.  Energy traders not only have to keep up with all the latest supply and demand drivers, but also on how much the dollar might rebound given the Fed’s tightening path.  Oil will likely remain heavy here as inventories are up, refinery maintenance is here, and on global growth concerns.


Gold prices are slightly higher as the bond market selloff takes a break ahead of the FOMC minutes.  The bond market will need very hawkish minutes for the 10-year to break above the 4.00%, which could spell trouble for gold.  The big question is if the minutes will open the door for some to expect four more Fed rate hikes.  After Fed Bullard’s peak of 5.375% comment, traders might not expect them to be that hawkish.

Very hawkish Fed minutes could happen, but will it take gold back below last week’s lows of $1827 is the big question? ​


Bitcoin edges lower ahead of FOMC minutes. Bitcoin’s small decline is meaningless as traders brace for what a lot of traders believe could be hawkish Fed minutes. Bitcoin’s rally has stalled at $25,250 and depending on what happens with risk appetite at 2pm EST could determine if we see the February consolidation continue or if we have a breakout.  If the $25,500 is reached, momentum traders might try to support a rally towards the psychological $30,000 level.  If bearish momentum returns, Bitcoin has strong support at the $22,500 region.

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.

Ed Moya

Ed Moya

Senior Market Analyst, The Americas at OANDA
With more than 20 years’ trading experience, Ed Moya is a senior market analyst with OANDA, producing up-to-the-minute intermarket analysis, coverage of geopolitical events, central bank policies and market reaction to corporate news. His particular expertise lies across a wide range of asset classes including FX, commodities, fixed income, stocks and cryptocurrencies. Over the course of his career, Ed has worked with some of the leading forex brokerages, research teams and news departments on Wall Street including Global Forex Trading, FX Solutions and Trading Advantage. Most recently he worked with, where he provided market analysis on economic data and corporate news. Based in New York, Ed is a regular guest on several major financial television networks including CNBC, Bloomberg TV, Yahoo! Finance Live, Fox Business and Sky TV. His views are trusted by the world’s most renowned global newswires including Reuters, Bloomberg and the Associated Press, and he is regularly quoted in leading publications such as MSN, MarketWatch, Forbes, Breitbart, The New York Times and The Wall Street Journal. Ed holds a BA in Economics from Rutgers University.
Ed Moya