EM FX: PLN, HUF Rally on Ukraine Story, But Moves Limited Overall
- PLN, HUF pop higher on the Russia-Ukraine story, reversing earlier losses, though the moves remain relatively contained for now.
- There are some notable caveats in the story, potentially explaining the lack of meaningful follow through: "Still, he declined to say how a possible compromise would look like on territory, the thorniest issue at the talks."
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COMMODITIES: Gold's Short-Term Bullish Theme Intact Following This Week's Gain
A volatile impulsive bull wave in WTI futures remains intact. From a technical analysis standpoint alone, the sharp pullback from Monday’s high is not a surprise, given that the uptrend was in an extreme overbought position. The move down is allowing this overbought condition to unwind. A key support zone to monitor is $73.64 - $67.06, the area between the 20- and 50-day EMAs. A clear break through this area would signal a possible trend reversal. Gold is in consolidation mode and continues to trade below $5419.11, the Mar 2 high. A S/T bullish theme is intact following recent gains. The metal has cleared all key retracement points of the sharp sell-off between Jan 29 - Feb 2. This strengthens the short-term bullish theme and signals scope for an extension towards key resistance and the bull trigger at $5595.5, the Jan 29 high. Initial firm support to watch lies at $5095.9, the 20-day EMA.
- WTI Crude up $3.75 or +4.49% at $87.43
- Natural Gas up $0.09 or +2.88% at $3.106
- Gold spot down $4.57 or -0.09% at $5186.95
- Copper down $11.05 or -1.86% at $583.95
- Silver down $1.14 or -1.29% at $87.1745
- Platinum down $25.48 or -1.16% at $2177.97
EQUITIES: Recent Rebound for EuroStoxx Still Considered Corrective
The sharp rebound in EuroStoxx 50 futures from Monday’s low is for now, considered corrective and this is allowing an extreme oversold trend condition to unwind. Key S/T resistance to watch is 5932.54, the 50-day EMA. A clear break of this average is needed to signal a possible reversal. A resumption of the bear leg would suggest scope for an extension towards 5500.00, the Nov 21 ‘25 low. A clear breach of this support would strengthen the bear cycle. A sharp bounce in S&P E-Minis on Monday appears corrective - for now - and this has allowed an oversold trend condition to unwind. The recent breach of 6751.50, the Feb 6 low, confirms a range breakout and highlights a stronger short-term bear threat. A resumption of weakness would open 6583.00, the Nov 21 ‘25 low and a key medium-term support. Initial firm resistance is 6890.53, the 50-day EMA.
- Japan's NIKKEI closed higher by 776.98 pts or +1.43% at 55025.37 and the TOPIX ended 34.57 pts higher or +0.94% at 3698.85.
- Elsewhere, in China the SHANGHAI closed higher by 10.296 pts or +0.25% at 4133.433 and the HANG SENG ended 61.14 pts lower or -0.24% at 25898.76.
- Across Europe, Germany's DAX trades lower by 384.03 pts or -1.6% at 23572.24, FTSE 100 lower by 105.29 pts or -1.01% at 10301.28, CAC 40 down 76.3 pts or -0.95% at 7976.5 and Euro Stoxx 50 down 74.11 pts or -1.27% at 5760.59.
- Dow Jones mini down 159 pts or -0.33% at 47580, S&P 500 mini down 13.25 pts or -0.2% at 6773, NASDAQ mini down 47.5 pts or -0.19% at 24931.5.
OIL: Rallying Despite Reports Quantifying Potential Strategic Reserve Release
Latest sources update from the WSJ reaffirms that “the International Energy Agency has proposed the largest release of oil reserves in its history to bring down crude prices that have soared during the U.S.-Israel war with Iran”.
- The WSJ sources go on to note that “the release of 400 million barrels of oil would more than double the agency's biggest prior release, when IEA member countries in 2022 put 182 million barrels on the market after Russia launched its full-scale invasion of Ukraine”.
- Meanwhile, BBG’s source reports covering the matter flag the potential for a slightly less aggressive strategic reserve release noting that “the IEA has proposed a release in the range of about 300 million to 400 million barrels”.
- Oil continues to rally despite the reports, which have quantified the likely release size for the first time (prior reporting pointed to the potential for a record release. FI & equities remain under pressure as a result.
