Morning Insights Monday 14 February 2022
Global Markets Update
U.S. MARKETS
Equity markets closed lower on Friday, with the S&P 500 down -1.9%. NASDAQ down -2.8% and Dow Jones declining -1.4%. Amid rising geopolitical tensions with the U.S. warning Russia could take offensive military action against Ukraine as early as next week. Leading to the U.K. and U.S. advising citizens to leave Ukraine and U.S. President Joe Biden sending Vladimir Putin an ultimatum about the consequences of any invasion of Ukraine, warning that Russia would face “severe costs.” U.S. consumer sentiment declined further in early February to a fresh decade low as views about personal finances deteriorated due to intensifying inflation concerns with consumers now expecting an inflation rate of 5% over the next year, up from last month’s reading of 4.9% and the highest since 2008.
Long-dated U.S. treasury yields were lower, with the 2-Yr yield at 1.500% and the 10-Yr yield at 1.937%.
EUROPEAN MARKETS
European equity markets closed lower on Friday, with Stoxx Europe 600 down -0.6%, U.K. FTSE 100 down -0.1% and German DAX declining -0.4%, amid fears of aggressive monetary policy tightening that could slow economic and profit growth. The U.K. economy expanded at the fastest pace since World War II in 2021. After suffering a milder hit than expected in December, with +7.5% GDP expansion, the largest since 1941. Making Britain the fastest-growing advanced economy in 2021.
ASIAN MARKETS
Asian equity markets closed lower on Friday, with the Shanghai Composite down -0.7%. KOSPI down -0.9% and Nikkei 225 remaining closed for a holiday. The Hang Seng declined -0.1%, after Hong Kong’s health officials warned that the city is facing a “crisis”. As a record 2,000 preliminary positive cases threatened to overwhelm hospitals and upend its Covid Zero strategy.
WTI oil is trading at US$93.10 a barrel. Iron ore price is at US$137.07 per ton. Spot gold is trading at US$1,859 per oz.
