Daily Market Insight for the 18th March 2022

hi there traders this is brad gilbert with the daily market insight for friday the 18th of march all right now as we come into the uh australasian session some sort of weird kooky things happening now the main theme here is okay so us equities wall street stocks and oil prices rise after aggressive fed hike outlook now the oil still revolves around the oil supply or the oil shortage you know based around the russian whole russian issue now wall street stocks height uh rally on after aggressive fed outlook that just doesn't make sense right to me it's it's sort of the opposite because if the fed raises interest rates aggressively right people pull their money out of the stock market and they start to cover up their debt holes so that doesn't really uh float with me and i had a good question there from lee today and it's sort of i can see the weird picture that we've got here we've come out this week the fed fomc meeting was the key to it uh you know hike rates very aggressive sort of hawkish tone the bank of england have raised rates not so aggressive ecb have come out and said basically there goes still room to move before they start raising rates so you think the dollar would be higher and with that fed rate hikes these would be lower to me it's almost like a market correction right this this doesn't make at all sense so give it a day and we'll see how it sort of unfolds the key to it is here the um us equity future is coming in lower right you that sort of makes a bit more sense maybe correcting a bit of that move and it may be just a bit of a rebalance of the u.s equity markets because they have uh been getting hammered of late so but this you know with the u.s equity futures coming off you'd think that would be a bit of a reversal of the risk on risk off profile okay so risk on during the us day sees euro sterling aussie kiwi pop to the top side you just got to go with that regardless of what the fundamentals are doing but this sort of correction here at the moment in the asian session where u.s equity futures are coming off you'd think that would sort of turn the euro sterling aussie down and send the dollar up but we're not really seeing that right that's tells me there's some major discombobulation in the markets at the moment and when you don't see i mean you may see things lining up or not to me uh more of a traditional you know background and doing this for 30 years i don't like it when the picture doesn't match up with what's going on right i mean it just doesn't sort of float with me that well that uh the currencies of the dollar and the interest rate cycle isn't doing the right thing with the equity markets so let me just come over here just have a look at the uh charts and see where everything is okay the dollar index well it really hasn't gone anywhere okay and but the real surprising factor here after the fed right they've said they're going to be you know potentially raising interest rates the ecb a little bit more neutral uh we're still testing this um resistance line okay and it's like there's a bit of a stop-loss run uh over the last sort of day or so now it's just sort of starting to edge higher and i'm sort of starting to weigh up what's going on like the global equity markets have had a had a bit of a reprieve i don't think that's the negative story is over just yet euro is the big question mark what's going on to me it should be heading south right that doesn't mean i go in and get short here i'd start to question why it's not going down right that's one part of it and i will wait to get into the trade when it does start to show signs of weakness on the daily charts still not overbought and that's one of those things the key part to me i'm looking at this across the board right and the volatility index is just back to 25 right so that tells me the market is very comfortable or becoming extremely desensitized to the russian ukraine issue right and that is they're comfortable with the whole risk profile of what's going on we're going to see how things pan out from there now oil on a daily basis did tweak the the trend line here but then sort of come back to 104 maybe some unfinished business they were trying to push it down but it just won't go just yet someone's either manipulating oil which is either opec or someone else or we'll have to see how that plays out and obviously goal just keep an eye on this gold is basically following oil uh very closely and even though bitcoin is under the 200-day moving average it still looks like it's found a bit of a home and continues to trade sideways the real surprising aspect for me is um the equity markets right now let me just change the color of that because it doesn't sort of show up very well like the nasdaq has picked itself up off the floor uh and uh the s p 500 sort of held that 200-day moving average uh the nasdaq's just popped above it is that enough to sort of convince me that it's going up i don't know but i tell you what it's that's a pretty decent move back above that level um if there are future fed rate hikes these things are going down right to me it's almost looking for better levels to get short so that's something for those traders trading equity indices to keep an eye on uh all right just uh a quick flick through the uh other major pairs the dollar up basically against the safe havens the swiss and the yen uh the dollar well dollar cad's getting pulled all over the place and with that recent you know bit of weakness in um oil as it was falling back you know back down towards that sort of 90 buck level we did see a little spike in dollar cad but it's not enough to keep it going at this point you've got uh euro right at the crossroads i think there might be a few more stops here but still i i'm very happy and confident and happy to be looking to get short euro on the next sort of spike right i want to see it really flush out the stops if they haven't all been triggered so far and that tells me i just i just like it because there's nothing really to cheer about in europe at this point especially with the positive or hawkish fed stance sterling well that's down in the doldrums and that's mainly connected with the uh the whole russian ukraine situation aussie and kiwi i tell you they are just cruising as though nothing is going on i can tell you the economies aren't really rocking the rock in the house so you'd expect those things to come into focus once europe calms down all right that's that's pretty much the way of it so when you come back and you start looking at the uh overall markets try and factor in right but we do have some fundamentals coming out but you know what they're not the uh the key thing that traders are looking for right this uh major movement in the u.s equity markets obviously down just at the moment but uh looking at yesterday they had a nice little reprieve uh you're waiting to sort of connect the dots here and see if it starts to impact the uh currencies in a rational format right and then also you know you can be looking at commodities safe havens um and everything else for that matter right you've got to make sure everything fits into place if you are looking for um uh some some late action are the baj going to do anything i wouldn't think so right i don't i can't see them doing anything almost ever uh and uh you come down and that's pretty much where the weekends you get some existing house numbers i don't see the canadian numbers or the us numbers they're really impacting right the market's still deciphering what's happened with following the fomc and it's a bit of a repositioning right flushing out of some stale long positions in the dollar right re repositioning and looking forward to the following week where we've got a fresh round of data you get those big central bank meetings out of the way hopefully the markets start to connect with what the core fundamental backdrop is if it doesn't well that's a bit of a sign to sort of sit on the sidelines and wait and see what happens uh that's where we are guys uh if anything the most intriguing uh currency or instrument at the moment to me is euro you can see it hasn't uh finished here this is the hourly charts it's still sort of tweaking higher uh he's a great level of beginning short obviously but that's like what 300 points away you'd be scratching your head if you're waiting for that but stranger things have happened keep an eye on it i still like euro down but we don't have a level at the moment and it doesn't make a bit of sense so you sit back and wait alright guys have a good one all the best cheerio