According to the news of China Central Television, on February 15, the Russian Ministry of Defense said that some Russian military forces had completed military exercises and returned to their stations from the Russian Ukrainian border.
On the same day, Russian President Vladimir Putin held talks with German Chancellor Scholz on the situation in Russia and Ukraine. Scholtz said that some Russian troops who ended the exercise are withdrawing from the Russian Ukrainian border, which is a good trend. Putin pointed out that Russia will also decide on follow-up actions according to the development of the situation, but how the situation develops does not just depend on Russia.
The news of Russia’s withdrawal triggered expectations for the easing of the situation in Russia and Ukraine, and international financial markets fluctuated again.
European and American stock markets rose sharply
At the close of February 15, the main stock indexes of Russian, European and American stock markets rose sharply. Russia’s MOEX index rose 3.42%. The three major U.S. stock indexes rebounded for the first time after falling for three days. The Dow rose 1.22%, the S & P 500 index rose 1.58% and the NASDAQ index rose 2.53%. The three major stock indexes in Europe also rose across the board on the same day. The FTSE 100 index in the UK rose 1.03%, the CAC40 index in France Rose 1.86% and the DAX index in Germany rose 1.98%.
In terms of a shares, on February 16, the three major A-share indexes closed up slightly, with the Shanghai index up 0.57%, the Shenzhen Component Index up 0.23% and the gem index up 0.07%.
crude oil, gold and other safe haven assets fell across the board
Crude oil, gold and other safe haven assets fell across the board. International oil prices fell from a seven-year high. On February 15, the settlement price of NYMEX crude oil futures in March 2022 was US $92.07 per barrel, down US $3.39/barrel or 3.6% from the previous trading day; The settlement price of ice oil distribution futures in April 2022 was US $93.28 per barrel, down US $3.20/barrel or 3.3% from the previous trading day.
London gold is now falling from US $1879 / oz to US $1853 / oz, Comex gold futures contract in recent months has also fallen by nearly US $30 from the high of US $1881, and Comex silver futures have also fallen.
the Fed’s interest rate hike has become the focus of the market, the upward US bond yield has a great negative impact on A-share overvalued companies
US bond yields rose, and 10-year US bond yields returned to above 2%.
Referring to past experience, geopolitical conflicts such as the Russian Ukrainian crisis have a relatively limited impact on US stocks and a shares. At present, the Chinese market is more concerned about the Fed’s interest rate hike.
The Federal Reserve will release the minutes of its January meeting on Wednesday (US time). As the US CPI rose 7.5% year-on-year in January, the highest in 40 years, the market is closely watching whether the minutes of this meeting will reveal information about the Fed’s interest rate hike plan, inflation prospects or balance sheet comments. At present, it is generally expected that the Federal Reserve will raise interest rates by 50 basis points in March, with a cumulative increase of 100 basis points by the middle of the year.
Everbright Securities Company Limited(601788) pointed out that historically, the valuations of A-share and Hong Kong stock markets have declined during the Fed’s interest rate hike, but if corporate earnings are strong, it can offset the negative impact of the Fed’s interest rate hike on market valuations. The impact of changes in the real yield of US bonds on market valuation is more obvious. The upward yield of US bonds has a great negative impact on A-share overvalued companies. At present, the yield of US bonds has fully reflected the expectation of raising interest rates this year. Therefore, if there is no unexpected black swan event, such as the escalation of the geopolitical crisis in Russia and Ukraine, the actual rise space of the long-term yield of US bonds will be limited in the short term after the future interest rate increase is implemented. However, considering that US inflation is expected to peak and fall, the real yield of US bonds may rise further. The time period for the fast switching of A-share market style from overvalued value to undervalued value has passed, but the valuation of high valuation companies is difficult to return to the previous level in the short term.
For safe haven assets such as precious metals, GF futures pointed out that the recent geopolitical risks and the continuous strengthening of commodity prices such as oil prices have once again become the main driving force for the rise of precious metals, and the high inflation pressure has increased the probability of the Federal Reserve raising interest rates by 50 basis points in March. The expectation of the current round of “interest rate increase + table reduction” of the Federal Reserve is expected to bring large short-term fluctuations to the price of highly valued assets, but it has a relatively small impact on the undervalued precious metals and other assets. In the short term, inflation concerns and geopolitical risks are expected to be greater than the expected impact of the Fed’s interest rate hike, but there is uncertainty in the change of the situation, so it still boosts the price of precious metals. In the medium term, the maintenance shock of US bond yield and US dollar index still has a certain inhibition on the price of precious metals.
