US open: Futures pare earlier gains, Russia headlines in focus

US futures

Dow futures +0.05% at 34445

S&P futures +0.1% at 4403

Nasdaq futures +0.02% at 14277

In Europe

FTSE +0.05% at 7568

Dax -0.8% at 15256

Euro Stoxx -0.5% at 4126

Russian troop numbers continue building

US futures are moving cautiously higher, after steep losses from the previous session as risk sentiment improves.

Whilst fears of Russia invading Ukraine saw Wall Street record one of its worst daily declines this year, today, optimism surrounding a peaceful solution is boosted riskier assets, helping futures higher, before falling again

A planned meeting for Tuesday next week, between US secretary of state Anthony Blinken and Russian foreign minister Sergey Lavrov was the catalyst to calm market fears. The broad expectation is that Russia won’t invade between now and then. However, reports that Russia has amassed 190,000 troops on the border despite claims of pulling troops away, is unnerving investors

Risk sentiment has been seesawing on Russian, Ukraine headlines and this is expected to continue next week.

There is no high impacting US data release due today. Instead, there are plenty of Fed speakers to shed further light on where the Fed is going with monetary policy. Fed policymaker James Bullard spoke yesterday, reinforcing his view that the Fed should hike rates by 1% by July. Speeches from Charles Evans, John Williams, and Lael Brainard will be listened to carefully to see where they sit on the hawkish scale, keeping in mind the minutes from the latest Fed meeting were less hawkish than expected.

In corporate news:

Roku slumps 25% pre-market after quarterly numbers disappointed. Revenue missed expectations owing to supply chain issues. The video streaming service saw users hit 60.1 million.

Where next for S&P 500?

After failing again to break above 4590, the price is extending its fall lower. The price trades below its falling trendline and below its 50 & 100 sma on the 4 hour chart.

The RSI below 50, combined with the 50 sma crossing below the 100 sma are keeping sellers hopeful of further losses.

The price is testing 4360, yesterday’s low and a level which has offered support on several occasions across late February. A fall below here would open the door to 4275 the late January & early October low and 4220 the February 24 low. A break below here would be significant and could spark a deeper selloff.

On the upside, a move above 4475 the 50 & 100 sma is needed to bring 4530 the February 11 high into focus.

FX markets USD flat, GBP gains

USD trades flat as but is set for weekly losses after the FOMC minutes were less hawkish than expected and US jobless claims rose, defying expectations of a decline.

GBP/USD is on the rise and is set to book weekly gains after strong retail sales. UK retail sales jumped 1.9% MoM in January rebounding firmly from -3.7% drop in December. Sales rebounded as Omicron fears waned. This was the third piece of strong data this week, after jobs data and inflation earlier this week. The BoE could look to hike rates in March.

GBP/USD +0.20% at 1.3616

EUR/USD +0.00% at 1.1372

Oil falls to $90 as Iran – US deal nears

Oil prices are set for the first weekly loss in nine weeks as investors weigh up easing Russia, Ukraine fears against the prospect of Iranian oil being released back into the market.

US – Iran nuclear talks are going. A draft accord agreed could be the start of a sequence of events which could see Iran legally export its oil again.

Adding to oil’s woes Russia, Ukraine fears are easing as hopes of a diplomatic solution rise again.

WTI crude trades -1.7% at $88.50

Brent trades -1.7% at $90.00

Learn more about trading oil here.

Looking ahead

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