News & Analysis
News & Analysis

Russia and Ukraine peace talks end without ceasefire & Bitcoin drops below 40,000 USD

11 March 2022 By Adam Kahlberg

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Global indices finished relatively flat compared to recent day’s price action on the back of failed peace talks between Russia and Ukraine and the ECB decision to speed up the ceasing of stimulus support.

All eyes were on the USA and their CPI figures which came in as expected with a rise of 0.8% for February and the 12-month figure increased by 7.9%. The Federal Reserve is still expected to increase interest rates by 25 basis points next week in a bid to stifle inflation. The Nasdaq dropped 0.95% and Dow Jones performed a little better only falling 0.34%. The S&P 500 performed similarly registering a 0.43% drop.

The European markets were a little weaker with the FTSE finishing the day down 1.27% and the DAX coming off worse with a 2.93% drop. The European Central Bank met on Thursday to discuss the early easing of its economic stimulus effort to combat inflation. The bank announced its plans to make an early exit from its asset purchasing which surprised some analysts who expected no change. The bank indicated that it is currently more concerned with the rise in inflation than the potential fallout from the conflict. They did, however, leave room for policy changes should things change.

Oil again fell with Brent Crude oil fell to $109.49 a 1.5% drop. Gold found some support near $2000 as it continues attracting investors and traders alike. Major commodities continue to be trading at elevated levels even with some tapering overnight.

Bitcoin had a big fall overnight dropping back below USD 40,000 to $39,285 a 6.37% drop at 10.20 pm GMT. On Wednesday BTC had spiked on the back of an executive order from Joe Biden that would potentially expand the adoption of cryptocurrency assets. However, the general sentiment between more risk on assets and inflationary fears has sparked the drop back below $40,000.

The AUD/USD performed well and has continued its recent rise, moving 0.49%. The move has been on the back of Australia’s healthy commodity industry and its geographical distance from the conflict. The NZD also rose against the USD holding its recent highs at 68 cents to $1.00. The AUD/EUR had another strong night rising 1.27%. The EUR showed weakness after the ECB’s policy shift and the lack of progression from the Russian and Ukraine peace talks and dropped 0.82% against the USD.

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