Equities’ retreat deepens despite strong US February jobs report - 7.3.2022

The Dollar strengthening continues currently. The live dollar index data show the ICE US Dollar index, a measure of the dollar’s strength against a basket of six rival currencies, rose 0.7% on Friday despite Bureau of Labor Statistics data showed US unemployment rate dipped to 3.8% while US employers added 678,000 workers to their payrolls in February.

Both EUR/USD and GBP/USD accelerated their retreating Friday as the EU statistics office Eurostat reported a slower than expected recovery in retail sales for January after 2.7% decline over month in December. Both euro and Pound are lower against the Dollar currently. AUD/USD accelerated its climbing Friday while USD/JPY accelerated its retreating with the yen lower against the Greenback currently and Australian dollar higher still.

Futures on US equity benchmarks are solidly down currently with 10-year US treasury yields down at 1.692%. US stocks continued retreating on Friday as Federal Reserve Bank of Chicago President Charles Evans said Fed should increase interest rates to close to its “neutral” setting this year, implying as many as seven quarter-point hikes. The three main US stock benchmarks recorded daily losses ranging from 0.5% to 1.7% led by travel stocks .

European stock indexes are in red currently after ending sharply lower on Friday led by bank shares. President Vladimir Putin warned that fighting in Ukraine would continue and signed a decree allowing the government and companies to pay foreign creditors in rubles. At the same time the Ministry of Finance warned that sanctions will determine if international investors are able to collect payments. Asian indexes are sharply lower today with Hong Kong’s Hang Seng index leading losses while Customs General Administration of China data showed China’s trade surplus growth exceeded expectations in December to February period.

Brent jumped over 10% today to 2008 highs amid news the United States, its European allies and Japan are discussing a Russian oil import ban. Russia is the world's top exporter of crude oil and oil products combined, with exports at around 7 million barrels per day accounting for 7% of global supply. Traders are concerned about a potential delay in reaching a nuclear deal with Iran after Russia demanded yesterday for a US guarantee that the sanctions it faces over the Ukraine conflict will not hurt its trade with Tehran. The US responded by pointing that the sanctions imposed on Russia over its Ukraine invasion have nothing to do with a potential nuclear deal with Iran. Prices rose on Friday. West Texas Intermediate (WTI) futures rallied 7.4% and are higher currently. Brent crude gained 6.9% to $118.11 a barrel on Friday.