Market Commentary – March 29, 2022

Kevin Jock

29th March 2022

All the three major U.S. stock indices dipped during the first half of the trading session, then retraced the losses to finally closed up at the end of yesterday’s market sessions, with the Nasdaq advanced 1.31%. It was a volatile session last night, caused by the rate of the five-year Treasury note surpassed the yield of the 30-year bond which created an inverted yield curve for the first time since 2006. Such phenomena are interpreted as a sign of a potential recession in the future.

European equities rallied on Monday, led by the automakers and defensive sectors with both the CAC 40 and DAX indices advanced 0.54% and 0.78% respectively. Investors are now focus on the peace deal between Russia and Ukraine as representatives from both sides are gathering in Istanbul for the fourth round of talks, hopefully it will yield some positive progresses to further boost the market sentiment. Meanwhile, the fighting is still ongoing with the Ukraine claimed that they have pushed Russian forces out of the key areas around Kyiv.

Performances of the Asia markets are generally up as of Tuesday, except for the Chinese market in which the local stock indices dropped slightly during the market close. Both HK’s Hang Seng Index and Japan’s Nikkei 225 indices hiked 1.10%. On the other hand, in China’s Wall Street (Lujiazui Financial District), more than 20,000 bankers, traders and other financial institution workers slept in offices to keep the financial markets operating while Shanghai is undergoing COVID lockdown.

Oil price recovered some losses from Tuesday due to the disruption of Kazakhstan’s supplies, with WTI crude ticked up slightly to trade at $108.83. Bitcoin price advanced past $47K and is now in positive territory for the year. Russian rouble has appreciated remarkably against the dollar to past 85 on Tuesday, reaching one-month high as the country is now switching to roubles for gas export payments.

EURO STOXX 50 chart (2022.3.29)

Figure 1 (Source: IS Prime) EURO STOXX 50 daily: The European benchmark rallied to a five-week high on today, once again surpassing 4,000 points as investors awaits the peace talks between Moscow and Kyiv.

 Headliner to Review

  • U.S. preliminary wholesale inventories rose by 2.1%, higher than the forecasted figure of an increase of 1.3%.

Headliner to Watch

  • German preliminary CPI data is expected to hike 1.6% month-to-month, up from 0.9% in the previous month as price pressures continuing to rise, with the ECB reluctant tighten monetary policy.
  • ADP Non-Farm Employment figure is due to release on Wednesday, expected to increase by 455K.

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Antony Tan
Kerry Man