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Commodities finish the week on a high as indices falter

7 March 2022 By Adam Kahlberg

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The market closed the week down overall as volatility continues due to the Russia and Ukraine conflict. The Dow Jones dipped 0.5%, the S&P500 fell 0.8%, and the NASDAQ performed the worst, declining 1.7%, despite generally positive sentiment from the USA concerning the employment figures released on Friday. Employers added 678,000 jobs to the workforce in February, and unemployment was lowered to 3.8% beating most analysts’ expectations. CPI figures will be on the agenda next week as inflation continues to garner attention.

European stocks were hit the hardest, with the DAX losing more than 10% over the week and 4.41% on Friday, as it continues to be hit hard by the conflict. The FTSE also had a tough week and closed Friday down 3.48%.

Commodities had a belter week and got close to their largest rise in prices since 1960. European natural gas more than doubled in price, wheat soared 40%, and oil increased 20%. These increases may have an impact on the energy and commodity sector in the Australian market going forward. The surge in energy prices has occurred despite economic sanctions that have not targeted Russia’s energy exports.

Gold finished the week exceptionally strong, closing at the upper end of the weekly range towards $1,970. The price continues to provide a haven for investors as the volatility remains. Oil followed its strong closing towards the high of the week at $117.96.

Cryptocurrency

Bitcoin had shown strength earlier in the week, but it could not hold its highs around $45,000 BTC/USD. It closed the week below $40,000. Ethereum followed a similar pattern falling to $2,593.

FOREX

The EUR/USD had a massive drop falling -1.23%. The Euro struggled against all of the currency pairs, recording big drops for the week. The GBP also was a weak performer for the week. Due to their geographical exposure, the EUR and GBP have been the most sensitive to news from the conflict. The AUD and NZD performed well for the week and have seen a nice move into recent resistance.

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