Risk Recovers, Dollar Off Tops, Oil Soars As Tensions Persist

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Despite the ongoing tensions surrounding Ukraine, European equity markets turned slightly positive on Wednesday. In part, this is due to speculations about the next round of Russia-Ukraine talks. The Ukrainian foreign minister said that it was not clear when the second round would take place. 

Kremlin noted that their people “will be there ready” for the next round of talks, and the Russian delegation will be waiting later today, ready to continue talks. The Russian economy is experiencing a serious blow but the country has solidity, potential, and plans, the official added.

As such, following a slightly negative open, European stocks turned green as investors expressed hope for some success towards resolving the issues between the two countries. Meanwhile, oil prices extended the ascent after the shortest OPEC+ meeting on record. The alliance has agreed to stick to its existing output plan which entails 400,000 barrel per day hikes to oil output quotas each month in April.

Brent crude jumped to fresh multi-year highs around the $114 per barrel figure and was clinging to the upper end of the extended trading range ahead of the North American session, with the market focus remaining on the Russia-Ukraine situation.

Elsewhere, the data out of the United States showed that employment in the private sector rose by 475,000 in February, while January's estimate was revised higher to 509,000 versus the previous estimate for a 301,000 job loss. However, the dollar does not seem to have reacted to strong US jobs data and continued to trade in the 97.50 area, 0.14% on the day.

Earlier, the USD index briefly rallied to fresh multi-month highs around 97.83 before retreating partially as risk trades have bounced somewhat. The greenback will stay supported by geopolitical tensions, with the market focus now shifting towards the 98.00 figure last seen in June 2020.