Mid Week Market Watch - 9th Feb 2022

Introduction

A warm welcome to all our viewers of the mid week news highlights. Today's article discusses the recent events taking place over the last few days.

Gold has had steady gains from the 31st of January, $1792/ounce to $1829/ounce.
US treasury yields, market anticipation of the tightening of the monetary policy, US-China & US-Japan trade deals, and the Russia-Ukraine tensions are believed by analysts to have contributed to the gains in gold prices. Gold represents a safe-haven asset, especially during geopolitical tensions.
Global central banks are in a hawkish mood due to the inflation fears, mainly backed by the US jobs report issued on Friday. Last month's Consumer Price Index rose to a 40-year high of 7% in December. On Thursday (the 10th of February), the government will release the CPI data for January. Bloomberg analysts expect that the figures will have risen to 7.3% over last year.
Adrian Ash, director of research at BullionVault, has indicated that the Fed has reacted too slowly and is far behind the curve on inflation. The market believes that the Fed is facing a difficult task in combating inflationary pressures without creating a significant economic contraction.
The CME FedWatch tool anticipates with high certainty that the Fed will raise interest rates in the upcoming FOMC meeting in March. Analysts at CME expect a 28.8% probability that the Fed will announce an aggressive rate spike of 1/2% compared to a 1/4%.

Russia has begun placing its military warships towards the Blacksea on Tuesday. The US and European officials are predicting a large-scale assault on Ukraine by Russia.
US and European officials will be keeping an eye on the next 12 days, fearing that Russia's military exercises beginning tomorrow could provide cover for a sudden strike against Ukraine.
President Biden's national security team indicates that a Russian disinformation campaign is underway to create phoney videos that could be used as a pretext for a Russian invasion.