Original insights into market moving news

Euro Market Open: US closes higher, shaking off a hawkish-FOMC; Ukraine pushed back on peace plan progress

  • Fed raised rates by 25bps as expected and expects a further six hikes in 2022 and four in 2023.
  • Fed Chair Powell said the Fed expects to reduce the size of its balance sheet at a coming meeting.
  • US stocks closed higher after shaking off the initial kneejerk hawkish reaction to the FOMC. APAC stocks also gained.
  • European equity futures are indicative of a slightly higher open with the Euro Stoxx 50 future up 0.2% after the cash market closed higher by 4.1% yesterday.
  • Ukrainian Presidential adviser pushed back on reports of progress on a 15-point peace plan.
  • DXY sits sub 98.50, EUR/USD gained a firmer footing on a 1.10 handle and USD/JPY breached 119 to the upside.
  • Looking ahead, highlights include EZ CPI (Final), US IJC, Industrial Production, Japanese CPI, BoE & CBRT Policy Announcements, Speeches from ECB's Lagarde, Lane & Schnabel, Supply from France & Spain.


  • FOMC raised rates by 25bps to 0.25-0.50%, as expected, with Bullard the lone dissenter calling for a larger 50bps rate rise. The updated rate forecasts now see the six additional hikes (in-fitting with market pricing ahead of the release) in 2022 and four in 2023 to reach 2.75-3.00% next year and staying at that level in 2024, before falling. Furthermore, the Fed lowered its estimate of the terminal rate by one-tenth to 2.4%.
  • Fed Chair Powell said the US economy is strong and the Fed expects to reduce the size of its balance sheet at a coming meeting with balance sheet reduction to play an important role in tightening policy. Fed Chair Powell added that Ukraine uncertainty will weigh on GDP but the growth outlook is strong and every meeting is live for rate hikes.
  • Fed Chair Powell said it is possible to move more quickly as we go through the year and that the Fed would move quickly if appropriate, while he noted there are seven meetings this year and seven rate hikes pencilled in, but haven't made any decision on front-loading policy or going steadily through the year when asked about 50bps rate hike increments.
  • Fed Chair Powell also noted a good number of participants see more than seven 25bps rate hikes this year and said the Fed has a plan to raise rates steadily over the course of the year. Powell added that excellent progress was made in balance sheet discussions which will look quite familiar to the last time, but faster, while he added details could come in May and could finalise the balance sheet for reduction as soon as the May meeting.


  • US stocks were positive led higher by the NDX once again after indices shook off the kneejerk hawkish reaction to the FOMC.
  • S&P 500 +2.2% at 4,358, Nasdaq 100 +3.7% at 13,956, Dow Jones +1.6% at 34,063, Russell 2000 +3.1% at 2,029.


  • The majority of the US Senate Banking Committee voted favourably on Powell's nomination for Fed Chair and Brainard's nomination for Vice-Chair, while the Committee also advanced Jefferson's nomination, but was tied on Cook's Fed nomination.
  • US FCC expects to update its list of foreign companies deemed national security threats later this month.




  • Ukrainian President Zelensky said talks with Russia are challenging but are still ongoing. He added that Russia has the advantage in the air and already crossed all red lines, while he hopes for assistance from allies.
  • Ukraine's presidential office adviser Podolyak said the recent FT article about significant progress on a tentative 15-point peace plan only represents the Russian position and that Ukraine seeks a ceasefire and withdrawal of Russian troops.


  • US President Biden said Ukrainian President Zelensky was convincing in his remarks and that Russia sanctions will only grow more painful over time. Biden announced he is offering an additional USD 800mln in security assistance to Ukraine which will include drones, 800 anti-aircraft systems, 9,000 anti-armour systems, 7,000 small arms and 20mln rounds of ammo.
  • US President Biden said Russian President Putin is a war criminal, while a Kremlin spokesman said US President Biden's comments about Russia President Putin being a war criminal are unacceptable and unforgivable rhetoric, according to Tass.
  • White House Press Secretary Psaki said they have seen no effort by Russian President Putin to de-escalate.
  • UK Ministry of Defence said Russia has probably expended more stand-off air-launched weapons than originally planned due to delays in achieving objectives and failure to control Ukrainian air space, while Russia is likely resorting to using older and less precise weapons which are less militarily effective and more likely to result in civilian casualties.
  • Slovakian defence officials expect to discuss potential transfer of Soviet-era S-300 air defence systems to Ukraine when US Defense Secretary Austin visits today, according to The Times Of Israel
  • US official noted increased Russian naval activity in the Black Sea, while it was separately reported that three Panamanian-flagged ships were hit during a Russian attack in the Black Sea in which one of the ships sank, according to Panama's government


  • G7 Foreign Ministers are to meet today to discuss Ukraine.
  • UN Security Council's western members demanded an emergency meeting for today on Ukraine, according to diplomats.
  • Canada banned TV service providers from broadcasting RT and RT France, according to Sputnik citing the Telecoms Commission.


  • Payment on Russian government dollar bonds with coupons due yesterday had not been posted by the close of business in London, according to Reuters sources.


  • US President Biden's administration is considering removing Iran's Islamic Revolutionary Guard Corps from its terror blacklist in return for a public commitment from Iran on de-escalation in the region, according to sources cited by Axios.



  • APAC stocks gained post-FOMC while Chinese tech remained euphoric on support pledges.
  • ASX 200 was led higher again by outperformance in tech and following strong jobs data.
  • Nikkei 225 rallied after recent currency weakness and despite the deadly earthquake in Fukushima.
  • Hang Seng and Shanghai Comp. continued to benefit from China’s recent policy support pledges which lifted the NASDAQ Golden Dragon China Index by 33% and with the PBoC boosting its liquidity efforts. Significant gains were also seen amongst developers after reports that China is not planning to expand its pilot property tax reform this year.
  • US equity futures were flat overnight and plateaued near yesterday's best levels.
  • European equity futures are indicative of a slightly higher open with the Euro Stoxx 50 future up 0.2% after the cash market closed higher by 4.1% yesterday.


  • DXY fell after the initial hawkish reaction from the Fed rate hike and steeper rate projections unwound.
  • EUR/USD rose in the aftermath of Powell's press conference but stalled near resistance at 1.1050.
  • GBP/USD benefitted from the softer greenback with focus shifting to the looming BoE meeting.
  • USD/JPY marginally pulled back after a brief incursion into 119.00 territory.
  • Antipodeans were fuelled by risk and strong Aussie jobs data, with NZD unfazed by the GDP miss.
  • Brazilian Central Bank raised the Selic rate by 100bps to 11.75%, as expected, while the decision was unanimous and it considered it appropriate to advance monetary tightening significantly into even more restrictive territory.


  • 10yr USTs initially declined as treasuries saw heavy selling at the front-end in the wake of the Fed’s aggressive rate hike projections, but then found support around 124.00 as the hawkish mood faded.
  • Bunds were higher and attempted to break out from the recent range centred around 161.00.
  • 10yr JGBs lack demand amid gains in risky assets and with the BoK kickstarting its two-day meeting.


  • WTI and Brent notched mild gains overnight amid the constructive moo and soft greenback.
  • US DoE said contracts were awarded for all 30mln bbls put up for sale from the SPR.
  • UK PM Johnson is optimistic Saudi Arabia may raise oil production, while he stated that he and Crown Prince MBS agreed to collaborate to maintain stability in the energy market.
  • India may purchase up to 15mln bbls of oil from Russia with state-run oil firms preparing to purchase heavy volumes of Russian crude that's going at a deep discount to help ease the margin pressure oil refiners.
  • Spot gold benefitted amid the hawkish unwinding post-FOMC.
  • Copper was kept afloat amid the broadly positive risk sentiment.
  • LME increased daily nickel trading limits to 8% from 5% and the daily price limits for other base metals are to remain at 15%, while HKEX said USD London nickel mini futures will resume trading today.



Bitcoin was indecisive with price action choppy around the USD 41,000 level.

UK Chancellor Sunak is preparing a big overhaul of the UK corporate tax system, according to FT.


  • PBoC injected CNY 80bln via 7-day reverse repos with the rate at 2.10% for a CNY 70bln net injection.
  • PBoC set USD/CNY mid-point at 6.3406 vs exp. 6.3298 (prev. 6.3800)
  • Hong Kong Monetary Authority raised its base rate by 25bps to 0.75%, as expected.
  • China's Shenzhen will allow companies to resume work and production in an orderly manner.
  • China plans an audit concession in the face of the US delisting threat, according to the FT.
  • RBI is consulting with the Indian gov’t and state-owned banks on the scale of INR-RUB payments required, as part of initial consultations on a INR-RUB trade agreement, according to sources via FT; would enable exports to Russia to continue post-sanctions.


  • Australian Employment Change (Feb) 77.4k vs. Exp. 37.0k (Prev. 12.9k)
  • Australian Full Time Employment (Feb) 121.9k (Prev. -17.0k)
  • Australian Unemployment Rate (Feb) 4.0% vs. Exp. 4.1% (Prev. 4.2%)
  • New Zealand GDP QQ (Q4) 3.0% vs. Exp. 3.2% (Prev. -3.7%)
  • New Zealand GDP YY (Q4) 3.1% vs. Exp. 3.3% (Prev. -0.3%)
  • Japanese Machinery Orders MM (Jan) -2.0% vs. Exp. -2.2% (Prev. 3.6%, Rev. 3.1%)
  • Japanese Machinery Orders YY (Jan) 5.1% vs. Exp. 8.1% (Prev. 5.1%)