GLOBAL STOCKS JUMP AS RUSSIA SIGNALS RESTRAINT ON UKRAINE

European and American equities tilted higher on Tuesday as the tensions on Ukraine appeared to ease. Media reports said that Russia was returning some troops to their bases after completing military exercises. That signaled that Russia was willing to de-escalate as talks with Western governments continued. Putin held talks with Olaf Scholz of Germany to deliberate on key issues. He warned Putin about the economic sanctions that would be levied, including on Nord Stream 2, the pipeline that connects Russia with Germany.

The Japanese yen weakened slightly against the US dollar after the latest GDP data from Japan. According to the statistics agency, the country’s GDP expanded by 1.3% in the fourth quarter and by 5.4% on a year-on-year basis. While these numbers were positive, they were worse than what analysts were expecting. The agency attributed the performance to capital expenditure and weak external demand, which rose by 0.4% and 0.2%. They were offset by strong consumer demand, which rose by 2.7% in the quarter.

The euro held steady against the US dollar after the mixed economic numbers from Europe. According to Eurostat, the bloc’s trade deficit widened to the highest level in 13 years as energy prices rose. Goods imports rose by 36.7% in December compared with the same month in 2020. Exports rose by 14.1% in the same period, leading to a trade deficit of more than 9.7 billion euros. In 2021, its trade surplus narrowed to 128.4 billion euros. Other numbers from Europe showed that the economy expanded by 4.6% in Q4.

EURGBP

The EURGBP pair moved higher after the latest EU GDP and UK employment numbers. It is trading at 0.8372, which is slightly higher than the intraday low of 0.8346. On the four-hour chart, the pair has moved below the 25-day moving average while the MACD has moved below the neutral level. Therefore, the pair will likely resume the downward trend as bears target the next key support at 0.8342

GER30

The DAX index jumped sharply as tensions regarding Ukraine eased. It rose to a high of 15,372, which was higher than this week’s low of 14,830. On the four-hour chart, the index moved slightly above the 25-day and 50-day moving averages. It also jumped above the key resistance level at 15,000. Oscillators like the William % Range have also risen sharply. Therefore, the index will likely keep rising if the tensions on Ukraine ease.

EURUSD

The EURUSD pair jumped sharply after the latest economic data from Europe. On the four-hour chart, it formed a hammer candlestick pattern on Monday. It then rose to the 38.2% Fibonacci retracement level. It remains below the 25-day moving average while the Relative Strength Index has tilted higher. Therefore, the pair will keep rising as bulls target the 23.6% retracement level at 1.1400.