Market Drivers – US Session – 18 February

During Friday’s session, the precious metal consolidated around the $1,886-$1,900 area, amongst exchanges of statements in news media between Russia, Ukraine, and NATO countries, keeping uncertainty around the current situation in Ukraine.

Brent crude futures settled 57 cents, or 0.6%, higher at USD 93.54 a barrel, while American WTI crude ended down 69 cents, or 0.5%, at USD 91.07 a barrel.

Both benchmarks hit their highest levels since September 2014 on Monday, but the prospect of easing oil sanctions against Iran has weighed on the market. Brent posted a small 0.9% rise in its ninth straight week of gains while WTI fell 1.7% this week.

Economic Data

According to the flash estimate of the European Commission’s Eurozone Consumer Confidence survey, the headline index fell to -8.8 in February versus forecasts for a slight rise to -8.0 from -8.5 the month prior of January.

The economy of the world’s top energy exporter grew the most in more than a decade in 2021, rebounding from a pandemic-related recession the year before as oil prices jumped and consumer spending grew. Russian gross domestic product rose 4.7% last year, the fastest since 2008, according to the Federal Statistics Service.

US Existing Home sales rose sharply according to data published by the National Association of Realtors on Friday. That took the 12-month rolling number of sales higher to 6.50M from 6.09M in December, above the expected 6.10M. The median price of homes sold was $350.3K, up 15.4% YoY. Home sales in the U.S. jumped in the first month of 2022, while the number of homes for sales hit a new record low.

Other Developments
The euro did not see any reaction to the slightly weaker than expected Eurozone Consumer Confidence data, with currency markets much more focused for now on geopolitical tensions between Russia, Ukraine and NATO as fighting in Ukraine’s Eastern Donbas region enters a second day.

European Central Bank policymakers are edging towards a rate hike before the end of 2022 to stem more persistent than expected inflationary pressures and a stronger inflation outlook, Bloomberg reported on Friday citing ECB sources. A consensus is emerging ahead of the March meeting that would set September as the end date for asset purchases, the sources continued.

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