European Open: Peace talks weigh on safe-haven demand

Asian Indices:

• Australia's ASX 200 index rose by 19.1 points (0.26%) and currently trades at 7,425.30
• Japan's Nikkei 225 index has risen by 153.34 points (0.44%) and currently trades at 34,861.24
• Hong Kong's Hang Seng index has risen by 278.47 points (1.3%) and currently trades at 21,683.35
• China's A50 Index has fallen by -143.97 points (-1.06%) and currently trades at 13,385.82

UK and Europe:

• UK's FTSE 100 futures are currently up 11.5 points (0.15%), the cash market is currently estimated to open at 7,494.85
• Euro STOXX 50 futures are currently up 11 points (0.29%), the cash market is currently estimated to open at 3,878.73
• Germany's DAX futures are currently up 36 points (0.25%), the cash market is currently estimated to open at 14,341.76

US Futures:

• DJI futures are currently down -96 points (-0.28%)
• S&P 500 futures are currently down -59.5 points (-0.4%)
• Nasdaq 100 futures are currently down -14 points (-0.31%)

Peace talks between Russia and Ukraine are set to take place in Turkey this week and will be hosted by Turkish PM Erdogan following a phone call from Putin over the weekend. Zelensky has said that Ukrainian neutrality remains on offer ahead of the talks. Separately, Joe Biden has tried to walk back comments he made on Saturday, and US officials clarified the US does not have a policy of regime change in Russia, after Biden said Putin “cannot remain in power”.

Equity markets on mainland China were lower overnight on news that Shanghai will go into lockdown to mass-test residents for COVID-19. The China A50 is down around -1% and the CSI300 fell -0.8%. US futures have also opened around 0.3% lower, whilst European futures are up around 0.2%.

FTSE 350: Market Internals

FTSE 350: 4195.63 (0.21%) 25 March 2022

• 188 (53.56%) stocks advanced and 150 (42.74%) declined
• 7 stocks rose to a new 52-week high, 5 fell to new lows
• 35.33% of stocks closed above their 200-day average
• 48.72% of stocks closed above their 50-day average
• 13.39% of stocks closed above their 20-day average

Outperformers:

• + 19.33% - Rolls-Royce Holdings PLC (RR.L)
• + 8.74% - HomeServe PLC (HSV.L)
• + 8.52% - Drax Group PLC (DRX.L)

Underperformers:

• -10.61% - Airtel Africa PLC (AAF.L)
• -5.33% - Vistry Group PLC (VTYV.L)
• -5.06% - Bellway PLC (BWY.L)

Precious metals lower ahead of peace talks

Hopes that this week’s peace talks between Ukraine and Russia will make progress saw demand for safe-havens falter. Gold fallen below 1950 and is now testing Friday’s low. A daily close around current levels today would leave a 3-bar bearish reversal. Silver is down around -1.3% and broken beneath Friday’s low. Copper and oil are also lower as Shanghai’s lockdown has instilled concerns of a dent in demand.

EUR/GBP prints bearish reversal candle at resistance

On Friday we outlined our bearish bias on the four-hour chart of EUR/GBP. Whilst momentum initially saw prices break higher, it topped out around the resistance zone and went on to form a bearish hammer on the daily chart. The high respected the 50-day eMA and reversed around the 38.2% Fibonacci ratio.

Overnight momentum has turned lower once more as it tries to break below 0.8320, en route to the lows around 0.8300. This means we now have a bearish bias on the daily and four-hour timeframes. From here we’d like to see prices remain below the intraday swing high around 0.8340 and head for 0.8300.

Yen continues to tumble

The Japanese yen fell another 0.8% against the US dollar overnight, and trades lower against all its peers. Whilst safe haven demand has diminished ahead of this week’s peace talks, the BOJ (Bank of Japan) have offered to by unlimited 10-year JGB’s to defend their yields curve. This also follows on from highly dovish remarks last week from BOJ members.

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