Equities bounce back

Stock markets in Europe are rebounding strongly on Friday, just one day after plunging on the back of Russia’s invasion of Ukraine.

It’s a remarkable turnaround when you consider that the invasion is still taking place and sanctions are being drawn up. There is still huge uncertainty around how bad the situation will get, given how quickly it has escalated over the last few days, which makes the shift in risk appetite all the more surprising.

With oil trading back below USD 100 a barrel and gas prices falling after yesterday’s surge, it would appear traders are anticipating minimal disruption to Russian exports either directly as a result of the invasion or from sanctions imposed. The latter is understandable as the proposed measures so far have underwhelmed, to say the least.

Considering how rapidly this has evolved and how volatile the markets have been for weeks, I wouldn’t be surprised to see sentiment continue to bounce back and forth. There’s nothing stable about this situation and that will likely continue to be reflected in the markets.

Bitcoin rebounds 15% as risk appetite bounces back

Bitcoin has been crushed at times over the last week but the improvement we’ve seen in risk appetite has given it a big boost. It’s now recovered around 15% from yesterday’s lows and is up more than 2% today. Bitcoin is the ultimate risk asset and if sentiment remains positive – which is a big if – it may not be long until it recaptures USD 40,000 and we’re discussing USD 45,500 again.

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

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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