Forex News March 01, 2022

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Russia has stated that it will continue operations in Ukraine until its goal is met. The Russians have reiterated that their primary goal is to protect Russia from threats posed by the West. Russia has stated that it is not occupying Ukrainian territory.

Meanwhile, Lavrov has stated that Ukraine possesses nuclear technology and that Russia must respond to this threat. Furthermore, the West must refrain from constructing military facilities in former Soviet Union countries. There are a lot of fighting words in the mix of these remarks, and they won’t do much to calm the roiling tensions right now.


  • USD/JPY falls to a low of 114.76 on the day.
  • USD/JPY is down from around 115.05 at the start of the session and the retreat comes as we see flows spill over into bonds and away from equities in European morning trade. 10-year Treasury yields have fallen 3.6 basis points to 1.803 percent, from around 1.86 percent earlier today. Meanwhile, S&P 500 futures are down 0.7 percent after rising 0.6 percent earlier.
  • Returning to USD/JPY, the drop establishes the 100-day moving average (red line) @ 114.40 as a key support level, alongside the February 2 low @ 114.15. If that fails, the January lows of 113.47-48 will be called into question, opening up a path to the November and December lows if they are also broken.
  • It’s all about Russia-Ukraine tensions right now, and while there aren’t many headlines, there’s still a sense of dread as we wait to see how things play out in the coming days. Elsewhere, EUR/JPY is down 0.5 percent to 128.33, AUD/JPY is reversing earlier gains from 83.85 to 83.40, and NZD/JPY has been denied at the 200-day moving average yet again, falling from 78.05 to 77.65.

10-year Treasury yields

•   Ten-year yields are currently down more than 8 basis points to 1.758 percent.

·  As the Russian invasion of Ukraine continues, we are seeing flows back into bonds, with markets becoming less certain about the rate hike cycle prospects in general. Treasuries are seeing new bids in European morning trade, causing 10-year yields to fall to a one-month low of 1.758 percent. The only minor bright spot in this is that the yield curve is at least slightly steepening, with 2s-10s now at around 42 bps, up from around 36 bps at one point last week. But a week of change does not equal a change in the trend, so we’ll see.

Nord Stream 2

• Reuters reports, citing two sources familiar with the situation, that Nord Stream 2’s owner is considering insolvency following the pipeline’s shutdown and sanctions.

• North Stream 2 AG is a Swiss company owned by Russian gas giant Gazprom. The firm is said to be considering insolvency as it tries to settle claims ahead of a US sanction deadline for other entities to stop doing business with it. That just adds to the drama after the pipeline did not even start operating after the pending certification in Germany was halted due to the Russia-Ukraine situation.

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