Interest markets are no longer pricing in the possibility that the Fed will raise its policy rate by more than a quarter point in March, as Russia’s invasion of Ukraine casts doubt on the tightening outlook.
Swaps tied to the Fed’s March 16 meeting were priced at just 24.5 basis points of tightening on Tuesday; This shows that investors are only expecting a quarter point increase. The market had pointed to a tightening of around 48 basis points for this meeting at one point in February, creating expectations for a larger rate hike amid rising inflation pressures.
The repricing of the Fed’s outlook, the buying effect of safe investment vehicle demand on US bonds, and the closing of open interest are causing interest rates to fall along the bond yield curve.
Where is the oil?
Crude oil prices continue to rise. The price of oil per barrel exceeded $100 due to the lack of concrete news about a ceasefire from Belarus, the acceleration of the exit from Russia by Western companies, and the concerns that the sanctions against Russia would cause major disruptions in oil supply.
Two major oil and gas companies, BP and Shell, have already announced that they will withdraw from their operations and joint ventures in Russia, and other Western companies are expected to join them.
These concerns have outweighed the rhetoric that the United States and its allies are discussing starting a coordinated use of oil from strategic reserves to reduce disruptions in supply.
will share the weekly crude oil stock forecast report.
The attention will also be on the extraordinary ministerial meeting of the International Energy Agency today and the meeting of OPEC+ on Wednesday.
It was up 3% to $98.60, which experienced a gain of more than 4% on Monday, to $101.41, up 3.6%. With the start of the Ukraine War last week, Brent oil had hit $105.79.
Gold finds support from turmoil
The war in Ukraine and inflation brought gold prices back above the 1900 dollar per ounce limit. Although the beginning of ceasefire talks between Russia and Ukraine weakens the demand for Russian sanctions from time to time, the main trend seems to be upwards.
It was $1,919.95, up 1%. It had increased by more than 1% in the previous session.
Russian and Ukrainian officials will resume the second round of ceasefire talks tomorrow, but there is no sign that Russia intends to stop the invasion.