STATE OF THE MARKETS

Equities mixed amid new sanctions. Global equities were mixed on Monday as new powerful sanctions were imposed on Russia over the weekend. While European markets mostly down, with FTSE (-0.42%), DAX (-0.73%) and Stoxx (-0.09%) were all in the red, followed by Dow (-0.49%) and S&P (-0.24%); Nasdaq (+0.41%) and Russell (+0.35%) managed to edge higher. Asian markets were up on early Tuesday, with Nikkei (+1.34%) and Shanghai (+0.32%) climbing higher at writing.

Markets remained in risk-off mood as bonds’ demand were elevated, sending yields lower with the longer dated 10Y fell to 1.82% and the 30Y fell to 2.16%. The shorter 2Y fell to 1.44% and the 5Y to 1.71% as the Dollar stood on firm bids at the 96.80 barrier.

In the commodities market, new sanctions on Russian banks and mega companies brought concerns on global energy supplies and retaliation, causing crude and gold to gap up. The black gold closed above $95/bl while the precious metal closed above the $1,900/oz handle. Elsewhere, the geopolitical crisis sent iron ore lower to $142.60/tn as demand may dampen in the near term.

In the FX space, medium and long term investors seemed bullish in bidding for Aussie and Kiwi, while the safe haven Swiss, Dollar and Yen retreated in demand. Short term traders seemed to be dumping the Dollar as the prospect of a bigger rate hike dimmed.

On Tuesday, markets look for earnings reports from SalesForce (CRM), Target (TGT), Bank of Nova Scotia (BNS), Sea Ltd (SE), Bank of Montreal (BMO), Baidu (BIDU), Autozone (AZO), Domino’s Pizza (DPZ), AMC Entertainment (AMC), Sofi Tech (SOFI), JM Smucker (SJM), Plug Power (PLUG) and First Solar (FSLR). The US manufacturing index and PMIs as well as construction spending will also be in the spotlight to assess the health of the US economy.