Markets came roaring back from heavy losses, up until Thursday, triggered by the Russian military operations in the Ukraine. US equity markets wiped out heavy early losses on Thursdays trade, to finish the day in the black. Friday saw a massive recovery, with the Dow rising over 800 points! The two day recovery all but eliminated the heavy losses suffered earlier in the week. This was not because of any halt to military activity, as the Russians look set to complete the rout by the weekend, but recognised the limited damage the incursion has on international markets. Ironically the most economic damage will be done by retaliatory sanctions.
The US Dollar settled back down, with the EUR pushing back to 1.1250, while the GBP broke back above 1.3400. Oil prices settled and commodity currencies regained lost ground, with the softer reserve. The AUD surged back above 0.7200, along with risk appetite, while the NZD pushed back above 0.6700. Economic numbers were completely ignored in the recovery rally, as the University of Michigan Economic Sentiment slumped, once again.
The coming week will focus heavily on economic developments and Central Bank activity, while watching Geo-Political developments in the Ukraine. US jobs numbers will be compulsory viewing, while markets will closely follow the monetary policy statements from the Bank of Canada and the RBA. An action packed week ahead!