What we are looking at:

  • Markets unwinding yesterday’s moves: The sharp rebounds for risk assets and declines on commodities such as oil are turning around again this morning.
  • Are commodities turning corrective?: Gold and silver are back lower again, but oil has rebounded. It is still too early to decisively call a corrective trend.
  • Caution ahead of risk events: The ECB and US inflation are later. This may mean relatively subdued moves in front, but elevated volatility in reaction later.  
  • Data trading: The ECB and US inflation are crucial today. The ECB rates decision may not get too much reaction but the press conference from 1330GMT will be key. At the same time, the US CPI data could show inflation above 8%, which would get a big reaction on USD.


If yesterday’s move was a dead cat bounce, it was one big cat! Huge rallies for indices and the under-pressure euro allowed at least some respite to recent selling pressure. Sharp reversals lower on commodities certainly played a role and there are now questions whether this is just a blip or the start of a deeper correction. Eyes will be on not only geopolitical developments with potential peace talks between Ukraine and Russia, but also on the ECB and US inflation. 

Market markets are looking cautiously lower once more this morning. Indices and the EUR are swinging back lower, with oil rebounding again. However, for now, the moves are relatively contained and may begin to settle ahead of the key risk events later. 

There are two huge events on the economic calendar. The ECB and US inflation are crucial today. The ECB rates decision may not get too much reaction but the press conference from 1330GMT will be key. At the same time, the US CPI data could show inflation above 8%, which would get a big reaction on USD.

Today's news

Sentiment tails off ahead of risk events: USD is rebounding this morning after a sharp sell-off yesterday. Oil is also bouncing after a flash crash late yesterday. Indices have pared some of yesterday’s recovery gains.

Treasury yields are slightly lower: After the US 10 year yield bounced +11bps yesterday it is giving back -3bps this morning. There is a slight tightening of the spread between 2s and 10s which is seen as risk negative. 

Russian invasion latest: Foreign ministers of Ukraine and Russia meet today in Turkey to discuss the potential for peace. President Zelensky noted that he was ready to give some concessions, but reports suggest this may not be met with similar concessions from Russia. 

US House of Representatives passes $1.5 trillion of government funding: This will fund the government through to September. It also includes around $14bn of aid for Ukraine.

Iranian nuclear talks are more complicated: The Iranian delegation believes that the talks are ever more complicated.

Oil latest: The UAE is favoring an increase in oil production. Western countries such as US and UK continue to urge countries such as Saudi and Iraq to increase production levels. 

Cryptocurrency falls back: Bitcoin jumped over 10% at one stage yesterday but has given a lot of that back this morning, with the price -6% and back around $39,000.

Economic Data:

  • European Central Bank monetary policy at 1245GMT Rates are expected to be kept unchanged with the main refinancing rate at 0.0% and the deposit rate at -0.50%. The press conference is at 1330GMT and could drive significant EUR volatility.
  • US CPI at 1330GMT Headline inflation is expected to increase to 7.9% in February (from 7.5% in January). Core CPI is expected to increase to 6.4% (from 6.0%) 
  • US Weekly Jobless Claims at 1330GMT Claims are expected to remain fairly steady at 216,000 (215,000 last week).

Major market outlook

Broad outlook: Markets look more cautious this morning ahead of key risk events. Some of yesterday’s big moves are unwinding. 

Forex: USD and JPY are performing better today. EUR is giving back yesterday’s gains. However, AUD and NZD are holding up well.

  • EUR/USD has tailed off after a huge rebound yesterday. The recovery has come up just shy of the 1.1120 resistance to leave a high at 1.1095. This more cautious look this morning is coming ahead of two massive calendar events (ECB and US CPI) which will create significant volatility later. The initial support is 1.0960. 
  • GBP/USD has been more tentative in recovery than EUR but has slipped back this morning. This is coming around the overhead supply between 1.3160/1.3270 and suggests the recovery is still a struggle. Back below 1.3137 would be disappointing now and would re-open 1.3080/1.3100. Initial resistance is at 1.3195.
  • AUD/USD has held up well once more this morning. A rebound from 0.7245 is looking to leave a higher low at 0.7287 and a move above 0.7350 would regain decisive upside traction for 0.7440 again.

Commodities: Precious metals are struggling to form support after yesterday’s sharp declines. Oil has been ticking higher for the past 21 hours since the flash crash.

  • Gold fell sharply yesterday but has started to find support around $1970. Reaction around an old breakout band $1960/$1974 will be an important near-term gauge. US inflation is a big risk event later today. Initial resistance is at $1999.
  • Silver has fallen sharply back towards the pivot band $25.30/$25.60. This consolidation is an important gauge for whether this is still a buy into weakness. Support from the four-week uptrend comes in just under $25.00 today. The initial resistance is at $25.83.
  • Brent Crude oil a huge and accelerating correction (flash crash maybe) set in yesterday with the price hitting $107.30. There has been a basis of support forming and the market is gradually ticking higher again. Resistance is overhead at $121.10 and reaction to this pivot could be important for the next move.

Brent Crude Oil

Indices: Indices making good ground in a near-term technical rally. However, recent rebounds have tended to falter in the US session.

  • S&P 500 futures have rebounded sharply but the move has just pulled back slightly into the basis of resistance of the old late February intraday lows between 4227/4275. This is a near-term gauge for a recovery. If the bulls can sustain the recovery and pull above 4325 then it opens for a more decisive move towards 4397/4420 again. Below 4227 turns the market lower.
  • DAX has rallied enormously in the past two sessions but is just given some back this morning. This has left resistance at 13,999. How the market reacts to this initial pullback will also be a gauge. A move back above 14,124 would continue the recovery. Initial support at 13,156.  
  • FTSE 100 may not have rallied as hard as the DAX but engaged an impressive rebound nonetheless. A tailing off this morning has left initial resistance at 7251. A move to buy into weakness would be a strong signal, with initial support at 7100 above 6984/7030.

Support and resistance levels