European Open: The Russian ruble turns to rubble, CBR hike rates to 20 pct

Asian Indices:

Australia's ASX 200 index rose by 51.3 points (0.73%) and currently trades at 7,049.10
Japan's Nikkei 225 index has risen by 26.72 points (0.1%) and currently trades at 26,499.07
Hong Kong's Hang Seng index has fallen by -217.15 points (-0.95%) and currently trades at 22,550.03
China's A50 Index has fallen by -25.56 points (-0.17%) and currently trades at 14,685.99

UK and Europe:

UK's FTSE 100 futures are currently down -97 points (-1.3%), the cash market is currently estimated to open at 7,392.46
Euro STOXX 50 futures are currently down -135 points (-3.41%), the cash market is currently estimated to open at 3,835.69
Germany's DAX futures are currently down -447 points (-3.07%), the cash market is currently estimated to open at 14,120.23

US Futures:

DJI futures are currently down -484 points (-1.42%)
S&P 500 futures are currently down -299.5 points (-2.11%)
Nasdaq 100 futures are currently down -87.5 points (-2%)

Futures markets across Europe are all lower ahead of the open, with US markets initially handing back most of Friday’s gains. Prices have since stabilised and it is possible that, without a new catalyst their provides either a resolution of escalation of war, prices could remain within last week’s range during a week of choppy trade.

However, Asian indices traded cautiously higher because they missed out on Friday’s rally during US hours, so they have effectively met in the middle with the US counterparts. The TOPIX is the best performer with a 1.5% rise, with the ASX in second place and currently up around 0.7%.

Russian ruble fell to a new record low

The news of fresh sanctions, selected Russian banks being removed from SWIFT and transactions to and from Russia’s central bank more than made its mark on the ruble. Russian citizens are reported to have been queuing up at ATM’s to try and purchase foreign currency all weekend.

The ruble was in freefall as the gravity of sanctions and restrictions on Russia’s central bank took effect. CME futures fell over 30% after the open, which is not what Russian’s who are queuing up at cashpoints across the country want to hear right now. And with Putin hovering his finger over the nuclear button it is difficult to see why anyone with money in Russia right now would want to keep it there right now.

However, the Central Bank of Russia has come out swinging by hiking rates from 9.5% to 20% in an attempt to support the flailing currency. The 11.5 bps hike is the highest single rise on record, and the eight consecutive hike in this cycle which began in April 2021. They also ordered Russian companies to sell 80% of their foreign currency reserves. Furthermore, securities that can be used as collateral for loans have been widely broadened.

FTSE 350: Market Internals

FTSE 350: 4196.79 (3.91%) 25 February 2022

333 (95.14%) stocks advanced and 14 (4.00%) declined
6 stocks rose to a new 52-week high, 15 fell to new lows
27.43% of stocks closed above their 200-day average
16.29% of stocks closed above their 50-day average
16.57% of stocks closed above their 20-day average

Outperformers:

+ 19.53% - EVRAZ plc (EVRE.L)
+ 17.00% - Polymetal International PLC (POLYP.L)
+ 14.06% - Darktrace PLC (DARK.L)

Underperformers:

-5.45% - Centamin PLC (CEY.L)
-5.10% - Petropavlovsk PLC (POG.L)
-4.84% - Hochschild Mining PLC (HOCM.L)

H&S top remains in play on GBP/AUD

GBP/AUD is currently within a countertrend move after hitting a 9-week low on Friday. We noted a head and shoulders pattern on the daily chart last week which projects a target around 1.8360, so we’re now waiting for evidence its current retracement is over for a potential swing trade short. There’s a resistance zone between 1.864/75, so signs of reversal candle below or around that level would be of interest.

Up Next (Times in GMT)

How to trade with City Index

You can easily trade with City Index by using these four easy steps:

Open an account, or log in if you’re already a customer

• Open an account in the UK
• Open an account in Australia
• Open an account in Singapore
Search for the company you want to trade in our award-winning platform
Choose your position and size, and your stop and limit levels
Place the trade

This report is intended for general circulation only. It should not be construed as a recommendation, or an offer (or solicitation of an offer) to buy or sell any financial products. The information provided does not take into account your specific investment objectives, financial situation or particular needs. Before you act on any recommendation that may be contained in this report, independent advice ought to be sought from a financial adviser regarding the suitability of the investment product, taking into account your specific investment objectives, financial situation or particular needs.

StoneX Financial Pte. Ltd., may distribute reports produced by its respective foreign entities or affiliates within the StoneX group of companies or third parties pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the report is distributed to a person in Singapore who is not an accredited investor, expert investor or an institutional investor (as defined in the Securities Futures Act), StoneX Financial Pte. Ltd. accepts legal responsibility to such persons for the contents of the report only to the extent required by law. Singapore recipients should contact StoneX Financial Pte. Ltd. at 6826 9988 for matters arising from, or in connection with the report.

In the case of all other recipients of this report, to the extent permitted by applicable laws and regulations neither StoneX Financial Pte. Ltd. nor its associated companies will be responsible or liable for any loss or damage incurred arising out of, or in connection with, any use of the information contained in this report and all such liability is hereby expressly disclaimed. No representation or warranty is made, express or implied, that the content of this report is complete or accurate.

StoneX Financial Pte. Ltd. is not under any obligation to update this report.

Trading CFDs and FX on margin carries a high level of risk that may not be suitable for some investors. Consider your investment objectives, level of experience, financial resources, risk appetite and other relevant circumstances carefully. The possibility exists that you could lose some or all of your investments, including your initial deposits. If in doubt, please seek independent expert advice. Visit www.cityindex.com/en-sg/terms-and-policies for the complete Risk Disclosure Statement.

ALL TRADING INVOLVES RISKS. LOSSES CAN EXCEED DEPOSITS.

City Index is a trading name of StoneX Financial Pte. Ltd. (“SFP”) for the offering of dealing services in Contracts for Differences (“CFD”). SFP holds a Capital Markets Services Licence issued by the Monetary Authority of Singapore for Dealing in Exchange-Traded Derivatives Contracts, Over-the-Counter Derivatives Contracts, and Spot Foreign Exchange Contracts for the Purposes of Leveraged Foreign Exchange Trading. SFP is also both Derivatives Trading and Clearing member of the Singapore Exchange (“SGX”). SFP is a wholly-owned subsidiary of StoneX Group Inc.

The information provided herein is intended for general circulation. It does not take into account the specific investment objectives, financial situation or particular needs of any particular person. You should take into account your specific investment objectives, financial situation or particular needs before making a commitment to invest, including seeking advice from an independent financial adviser regarding the suitability of the investment, under a separate engagement, as you deem fit. No representation or warranty is given as to the accuracy or completeness of this information. Consequently, any person acting on it does so entirely at their own risk.

The information does not represent an offer of, or solicitation for, a transaction in any investment product. Any views and opinions expressed may be changed without an update. To understand the risks and costs involved, please visit the section captioned “Important Information” and the “Risk Disclosure Statement”.

The information herein is not directed to, or intended for distribution to or use by, any person or entity who is a citizen or resident of or located in any locality, state, country or other jurisdiction where such distribution, publication, availability or use would be contrary to law or regulation.

StoneX Financial Pte. Ltd. 1 Raffles Place, #18-61, One Raffles Place Tower 2, Singapore 048616. Tel: 6309 1000. Co. Reg. No.: 201130598R.

This advertisement has not been reviewed by the Monetary Authority of Singapore.