While news of the Russia-Ukraine conflict has been in focus for the majority of the last two weeks, investors received alarming news of a fire at Europe’s largest nuclear power plant which sparked another wave of panic across markets. Risk-off assets such as gold and FX benefited from this while traditionally riskier investments such as stocks saw a significant pullback with the Asian session seeing significant declines as Nikkei dropped 2.2%, S&P/ASX 200 moved almost 0.6% lower and Kospi declined 1.1%. Today’s final trading session in Europe started in a similar way, with the German Dax reaching the lowest level since December 2021 and testing a support area below 13200 points before rebounding slightly as it appears that no damage was sustained by the reactor at the nuclear facility in Ukraine. As investors await today’s key NFP report from the US, which is traditionally one of the most important and followed pieces of macroeconomic data, it appears that focus remains on the escalating conflict which has shaken markets and could continue to do so with a rush away from riskier assets ahead of the weekend in an attempt to weather out any major events which may occur while markets are closed.

Gold tests key resistance as risk-off moods dominate markets

While we have seen a noticeable increase in volatility across markets, the situation escalated following the news of a fire in Europe’s largest nuclear power plant located in Ukraine which brought significant uncertainty and panic. Stock markets started the day trading lower and reaching the lowest level in several months while traditional safe haven assets appeared to be benefiting from this risk-off sentiment as gold returned to its recently tested high of $1945 after a brief pullback in the last few days. The precious metal remains favored by investors who are attempting to limit their risk exposure as we head into the weekend and ahead of today’s key NFP report from the US, which is expected to show an increase of 440,000 jobs. While Gold was unable recently to break through the resistance area of $1945, any further escalation or major news from the conflict could act as a catalyst and spark a surge of interest for safe haven assets, particularly in the last trading session of the week.

UK construction PMI shows highest increase in eight months

Today’s construction PMI indicated the fastest rise in construction output for eight months thanks to a marked and accelerated rise in housing activity and with input cost inflation dropping to an 11-month low. Despite news relating to the Russia-Ukraine war remaining in focus, these figures could reassure the Bank of England and lead it to take further action in the near future as consumer confidence shows signs of improvement and as several sectors in the economy continue to recover.