US open: Stocks push higher with Ukraine, inflation in focus

US futures

Dow futures +0.47% at 33370

S&P futures +0.39% at 4405

Nasdaq futures +0.54% at 14047

In Europe

FTSE +3% at 7430

Dax +3% at 14470

Euro Stoxx +3% at 3945

Learn more about trading indices

Hopes of talks cautiously lift stocks.

US stocks are set to edge slightly higher on Friday after a spectacular reversal on Thursday. However, they are still set to end the week in the red.

Risk sentiment suddenly improved yesterday following the announcement of sanctions on Russia, which were, once again, milder than expected. The sanctions were aimed at banks and financial markets once again.

Russia continues advancing towards Kiev despite the sanctions and cushioned by a build up of $600 billion in currency reserves thanks in part to surging oil and gas prices.

Reports that China’s leader Xi Jinping has told Putin to hold talks with the government in Kiev, are lifting risk sentiment further. Although Russian forces continue to attack, there could be hope of some level of negotiation.

On the data front, a slew of data revealed that the US consumer was holding up well even as inflation shot higher. The Fed’s preferred measure of inflation, the core PCE rose to 5.2%, above the 5.1% forecast and up from 4.9% in December. Personal spending also rose 2.1%, after falling -0.8% in December.

The data comes ahead of the Fed’s rate decision in March. The strong data would be supportive of a more aggressive move by the Fed to hike rates, maybe a 50 point hike, rather than 25 basis points. However, what the Fed plans to do could depend on what happens in eastern Europe.

Where next for the S&P500?

The S&P 500 rebounded off 4106 yesterday’s low. The rise higher has broken above several important resistance levels, which along with the bullish crossover on the MACD is keeping buyers hopeful of further gains. Buyers will be looking for a move over 4350 the 50sma and falling trendline support ahead of horizontal resistance at 4360. On the flip side support can be seen at 4275 the lae January low ahead of 4250 the February 21 low.

FX markets USD rallies, EUR rises

USD is trading lower despite upbeat data.

EUR/USD trades higher after German GDP contracted less than feared in Q4. GDP fell -0.3%, less than -0.7% initially estimated. Eurozone economic sentiment also improved to 114, up from 112.7, thanks to rising confidence in services retail and construction.

GBP/USD +0.1% at 1.3393

EUR/USD +0.2% at 1.1214

Oil slips but set for weekly gains of 1.8%

Oil prices easing lower, back below $100, but are still on track for gains in the region of 1.7% this week as Russia, Ukraine headlines remain in focus.

Oil fell away from 7-year highs after Western sanctions on Russia left the energy sector alone and after President Biden said that the US could release oil reserves to lower the price. A large than expected build in stockpiles also dragged on the price.

WTI crude trades -0.12% at $92.20

Brent trades -0.4% at $95.35

Learn more about trading oil here.

Looking ahead

18:00 Baker Hughes rig count

How to trade with City Index

Follow these easy steps to start trading with City Index today:

Open a City Index account, or log-in if you’re already a customer.
Search for the market you want to trade in our award-winning platform.
Choose your position and size, and your stop and limit levels
Place the trade.

From time to time, StoneX Financial Pty Ltd (“we”, “our”) website may contain links to other sites and/or resources provided by third parties. These links and/or resources are provided for your information only and we have no control over the contents of those materials, and in no way endorse their content. Any analysis, opinion, commentary or research-based material on our website is for information and educational purposes only and is not, in any circumstances, intended to be an offer, recommendation or solicitation to buy or sell. You should always seek independent advice as to your suitability to speculate in any related markets and your ability to assume the associated risks, if you are at all unsure. No representation or warranty is made, express or implied, that the materials on our website are complete or accurate. We are not under any obligation to update any such material.

As such, we (and/or our associated companies) will not be responsible or liable for any loss or damage incurred by you or any third party arising out of, or in connection with, any use of the information on our website (other than with regards to any duty or liability that we are unable to limit or exclude by law or under the applicable regulatory system) and any such liability is hereby expressly disclaimed.

City Index is a trading name of StoneX Financial Pty Ltd.

The material provided herein is general in nature and does not take into account your objectives, financial situation or needs.

While every care has been taken in preparing this material, we do not provide any representation or warranty (express or implied) with respect to its completeness or accuracy. This is not an invitation or an offer to invest nor is it a recommendation to buy or sell investments.

StoneX recommends you to seek independent financial and legal advice before making any financial investment decision. Trading CFDs and FX on margin carries a higher level of risk, and may not be suitable for all investors. The possibility exists that you could lose more than your initial investment further CFD investors do not own or have any rights to the underlying assets.

It is important you consider our Financial Services Guide and Product Disclosure Statement (PDS) available at www.cityindex.com/en-au/terms-and-policies/, before deciding to acquire or hold our products. As a part of our market risk management, we may take the opposite side of your trade. Our Target Market Determination (TMD) is also available at www.cityindex.com/en-au/terms-and-policies/.

StoneX Financial Pty Ltd, Suite 28.01, 264 George Street, Sydney, NSW 2000 (ACN 141 774 727, AFSL 345646) is the CFD issuer and our products are traded off exchange.