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16.03.202211:39 Forex Analysis & Reviews: US stock market on March 16, 2022

Exchange Rates 16.03.2022 analysis

S&P500

The situation regarding the Russo-Ukrainian conflict has stabilized. The Fed is due to meet today.

On Tuesday, the US market showed strong gains for the first time in a week on signs of stabilization in Ukraine. The Dow added 1.8%, the NASDAQ rose by 2.9%, the S&P500 gained 2.1%.

The S&P 500 trades at 4,262 and is expected to be in the range between 4,230 and 4,300.

The main topics for the market remain the conflict in Ukraine and the Fed. The US wholesale price inflation report for February was released yesterday. As expected, prices increased by 0.8%. However, there is a first sign of a slowdown in inflation. Core prices excluding fuel and food rose by only 0.2%. Today is the first time in a long period that the Fed will raise interest rates by 0.5%. The market will wait for comments from the Fed on how decisive the inflation-targeting text will be.

There has been little change on the conflict map for over a week now. Today is the 21st day of the conflict. Yesterday the US Senate voted unanimously in favour of a resolution condemning the Russian President as a war criminal for crimes against civilians. According to the UN, 690 civilians, including 48 children, have been killed in Ukraine since the conflict started. According to DNR-LNR authorities, 49 civilians have been killed in Donbas during the same period, with fewer than 30 in the previous two years. Yesterday, Biden signed the annual US budget, which includes $13.6bn in aid to Ukraine. Biden is scheduled to visit Poland next week. Prime ministers of the Czech Republic, Poland and Slovenia came to Kiev yesterday to meet Zelensky and to express support for Ukraine. Yesterday there were again very long talks on the Russo-Ukrainian peace via video link. Zelensky said that the negotiations have become more realistic, but it still takes time to achieve results. It is obvious that the positions of the sides are very far apart. What Russia demands as a condition for peace is unacceptable for Ukraine. Perhaps the positions of the sides will change after some time. Some experts believe that the conflict will in any case end completely or lose drastically its intensity by mid-May at the latest.

Oil settles around $100. Brent crude is trding at $101 on Wednesday.

USDX is at 98.80 and is likely to trade in the range between 98.50 and 99.10. The dollar is trading in a narrow range ahead of the Fed's meeting. A new wave of growth in the dollar is possible. It all depends on the text of the Fed decision.

USD/CAD trades at 1.2760 and is seen moving in the range of 1.2700-1.2900. The pair is in a range, but in case of a general rise in the dollar a rally to 1.2900 is possible.

The US market is set for strong growth despite the Fed's willingness to raise rates. Progress in ending the conflict in Ukraine would be a strong boost to growth.

*A análise de mercado aqui postada destina-se a aumentar o seu conhecimento, mas não dar instruções para fazer uma negociação.

Jozef Kovach,
Analytical expert of InstaSpot
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