CFD Update: Three Markets to Watch as Markets Open Today

CFD Update: Three Markets to Watch as Markets Open Today

Markets have started the week with further heavy selling as the conflict in Ukraine continued to intensify. From Friday’s crazy reports of Europe’s largest nuclear power plant being shelled to broken ceasefires and trapped residents unable to evacuate. Today’s reports suggested Russia had agreed to stop fighting on their side to finally allow trapped residents to evacuate to safe zones. 

Oil and Gold have been headline movers, but it hasn’t been all about them. We have continued to watch stock drops on stock indexes. European indexes and Asian indexes have been particularly hard hit, with several losing over 15% in the last two monthly bars, including this month. Oil has not only been a flyer as the world watches Russia and Ukraine, but the energy shock has sent oil prices flying. WTI has seen over 40% added in the last two months, and the rally has been running for the last four months straight. Oil jumped to 13-year highs today as reports mentioned the U.S and Europe could look at banning Russian crude imports. 

Getting back to stock indexes, the oil rally has also contributed to the decline. Oil at these highs ramps up inflation fears, that are already running hot and start to put growth pressure back on economies that are just beginning to come out of the pandemic. Business requires energy. High energy costs make business more expensive and can be passed onto the consumer, increasing the cost of goods. 

Surging inflation has mainly been a US and European issue, but if it ramped up all over the world, many economies might not be ready to start raising rates to combat it. For instance, Australia’s building industry has been kept alive by a super-hot housing market. Rising rates could cool off the housing market and put pressure on the building and trade industries. One major building group just failed. Higher rates and reduced business could show cracks in more companies. 

We’ve picked a few markets out to take a closer look. 

Euro Stoxx 50

The Euro Stoxx 50 lost 20% to its low. Europen shares, especially German shares, have been hit hard by the conflict in Ukraine. Sellers have cut close half of the rally seen from 2020. Today sellers retraced all gains made in 2021 after hitting 3381

EUSTX50 Daily

Hang Seng Index

This one went a little under the radar, but I saw the damage that has been done to this index and was quite surprised. 14% has been wiped off the index in the last two months and the price today slipped below the 2020 low. When you compare it to the JPN225 that’s where the shock comes from, as it has dropped 8%.

HK50 Daily

Gold

Gold has been a significant talking point during the crisis. Good old Gold went straight back to safe mode as traders looked for a safe bet in a time of crisis. The rally in the last two months has been rather explosive. Buyers have added over 11% to the value, and we saw $2000USD touched today. Price now sits 3.72% away from retesting highs set back in 2020 in the heart of the pandemic. Another factor that might be adding to the appreciation. Reposts suggest that Gold could be being used to pay for oil. This is interesting as oil has always been paid for in USD. But with Russia partially locked out of SWIFT and the Fed blocking their USD transactions, Gold could be a new payment option moving forward. 

XAUUSD Weekly

Uncertainty presents Volatility

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Joseph Jeffriess, Market Analyst in Eightcap
Eightcap is one of the leading CFD brokers in the market, providing online trading services to a wide range of clients from around the world. They offer 1,000+ CFDs based on Forex, commodities, indices, shares, and cryptocurrencies. The well-established trading company was founded in Melbourne, Australia, in 2009, and is regulated by the Australian Securities and Investments Commission (ASIC), the Financial Conduct Authority (FCA), the Cyprus Securities and Exchange Commission (CySEC) and the Securities Commission of The Bahamas (SCB).