Daily Alert – Thursday 24th March 2022: US-EU close to deal on energy

Mark NugentDaily Alert, March 2022

Daily Alert – Thursday 24th March 2022: US-EU close to deal on energy

Good morning.

US President Joe Biden wafts into Brussels today for a NATO meeting, a G7 meeting and a European Council Meeting. There are reports that a US-EU deal on energy may be in the offing, facilitating a strategic move away from Russian supply. It has been reported that there may be an announcement as soon as Friday. It was said after Russia invaded Ukraine that the Russians needed to lose and to be seen to lose. Looks like they meant it. It’s difficult to argue that the oil price is going to fall any time soon.

Risk sentiment was negative yesterday. As equities are so sensitive to risk sentiment, I closed my Japan225 long near to breakeven. It is moving up nicely today, which does not make my decision a bad one. When a primary driver of a trade disappears, in this case risk sentiment, you have to get out.

My WTI long trade is around 1 percent in the money.

The Bank of Japan did not change their “no hike” position, despite emerging energy-related inflation and the USDJPY rising through 120, a price that previously has caused much central bank gnashing of teeth.

I feel that the outcome of the many US-EU meetings today will have more effect on the markets than anything on the calendar. The mooted energy deal is very interesting indeed.

Have a good weekend when it comes. We’ll be back on Monday.

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