US open: Stocks steady as US plans to announce Russian oil restrictions

 

US futures

Dow futures -0.1% at 33790

S&P futures -0.2% at 4190

Nasdaq futures -0.45% at 13250

In Europe

FTSE -0.7% at 6916

Dax -0.1% at 12844

Euro Stoxx +0.1% at 3515

Futures under pressure but off session lows

US futures are pointing to a steady start to trade after steep declines in the previous session. The S&P500 closed almost 3% lower and the Dow Jones 2.4% lower on reports that the US could ban imports of Russian oil, sending oil prices roaring higher and fueling fears or spiraling inflation.

Those fears are lingering as oil prices and more broadly commodity prices across the board are rising higher. The US could announce as soon as today the ban on Russian oil.  Nickle trading was halted on the LME exchange after a short squeeze sent the price of metal over $101,000 a ton, double where it was trading last week.

Nickle is mainly used by auto and construction businesses and for stainless steel and more recently in battery metal in EV cars.

Stocks continue to join the exodus from Russia, with Adidas, Estee Lauder and Adobe announcing their withdrawal.

There are still some big names such as McDonalds and Coca-Cola and Starbucks which have remained tight-lipped about any plans to withdraw. For those companies which operate as a franchise in Russia, for example Starbucks, the decision to close is the franchise holder. However, McDonalds, owns most of the stores in Russia, raising questions over why they aren’t pulling out. McDonalds trades 8% lower this month.

Where next for the Dow Jones?

The Dow Jones has been steadily falling after hitting resistance at 341275 last week. The price has fallen below the 20 & 50 sma before finding support at 32350. The 20 sma cross below the 50 sma and the bearish RSI are keeping seller optimistic of further downside. Support can be seen at 32350 before 32250. A break below here could spark a deeper selloff. On the upside, buyers will look for a move over 33100 which would expose the 50 & 20 sma at 33430.

FX markets USD eases, EUR rebounds

USD is falling as the mood in the market improves slightly, halting the safe-haven flows which have been lifting the greenback in recent sessions.

AUDUSD is underperforming its major peers after rising to a 2022 high yesterday at 0.7440. The fall lower comes despite rising business confidence,  higher commodity prices and the slightly improved mood in the market.

EURUSD is rising, snapping a six-day losing streak. News that the EU is considering issuing joint bonds to help counter the fallout from the Russian war and sanctions, is offering some support to the euro for now, which has been hammered over recent sessions.

 

GBP/USD  -0.04% at 1.3099

EUR/USD +0.4% at 1.0900

Oil rises on Russia threats

Oil prices are on the rise, adding to gains in the previous session. Oil prices jumped yesterday to 14-year highs of $130 Brent and $128, on reports that the US could ban Russian oil imports before easing after German Chancellor Olaf Scholz said that he would not support such a measure.

Today Russia’s threat to retaliate by slowing gas supplies to Europe and sending oil prices to $300 if the US did sanction Russian oil. These threats are lifting oil prices again today.

API inventory data will be released later, although this is likely to take a back seat to Russian headlines.

WTI crude trades +2.4% at $120.53

Brent trades +3.4% at $126.00

 

Looking ahead

21:30 API crude oil inventories