US open: Stocks head lower, Russia fears grow

US futures

Dow futures -0.4% at 34845

S&P futures -0.5% at 4448

Nasdaq futures -0.62% at 14523

In Europe

FTSE -0.3% at 7568

Dax -0.2% at 15352

Euro Stoxx -0.5% at 4126

Risk off dominates

US futures are moving lower as investors digest reports of clashes in Ukraine, the latest jobless claims and as earnings fail to impress.

Russian backed rebels in eastern Ukraine and the Ukraine government are accusing each other of firing across a ceasefire line. At the same time Russia’s claims of pulling troops off the border have been questioned, with US intelligence indicating that Russia has amassed more troops. The deputy US ambassador in Russia has also been expelled.

Continued uncertainty over what could happen next is proving too much for equity bulls. The situation is clearly tense and headlines are expected to continue driving trading until either Russia invades, or there is clear evidence of a de-escalation.

US jobless claims unexpectedly rose last week to 248k, up from 225k, Expectations had been for a fall to 219k. The rise in claims comes as the number of vacancies in the US stands at 10.9 million. Given the high number of vacancies, the broad expectation would be for claims to continue falling.

In corporate news:

DoorDash jumps 24% pre-market after posting strong revenue growth in the fourth quarter. The food delivery firm continues to see growth despite restaurants reopening after pandemic restrictions.

Walmart rises 2.2% after forecasting for full year profit above market forecasts.

Where next for the Nasdaq?

The Nasdaq continues to trend lower, trading below its falling trend line dating back to 4^th January. and its 50 & 100 sma, The RSI below 50, in addition to the 50 sma crossing below the 100 sma are keeping sellers’ hopeful of further downside. Sellers need to take out support around the 14380 area, the October low and a level which offered support at several occasions in the last month. A break below here opens the door to 14035 the February low. Buyers would look for a move over 15050 to open the door to 15300 the February high.

FX markets USD falls, GBP extends gains

USD/JPY trades sharply lower in risk off trade, and after the Fed minutes showed the Fed were less hawkish than expected at the last meeting. Meanwhile the Japanese yen is finding strong support in risk off trade as Russia, Ukraine fears build.

GBP/USD continue to advance, building on gains from yesterday after inflation ticked higher to a fresh 30 year high. Bets are rising that the BoE will look to rise rates again sooner rather than later. Upside could be limited owing to weak risk sentiment.,

GBP/USD +0.20% at 1.3616

EUR/USD +0.00% at 1.1372

Oil falls as US – Iran deal nears

Oil prices are slipping lower as investors weigh up the Russia, Ukraine fears against the prospect of Iranian oil being released back into the market.

Whilst on the one hand eastern European jitters are back supporting the price of oil. On the other hand, US – Iran nuclear talks appear to be going well raising the prospect of increased supply.

The US and Iran are in the final stages of reviving the 2015 nuclear deal, with a decision, according to France, just days away. Should the deal be struck oil sanctions on Iran will likely to be lifted.

WTI crude trades -1.9% at $90.34

Brent trades -1.7% at $91.90

Learn more about trading oil here.

Looking ahead

14:00 ECB’s Lane to speak

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