Rise in gold and oil following the Ukrainian crisis; US stocks end flat

NEW YORK, Feb 16 (Reuters) – Oil and gold rose on Wednesday after NATO and the United States said Russia was increasing its troop numbers near Ukraine, while a reading Dovishness from the Federal Reserve’s latest meeting minutes helped stocks close mostly flat. on Wall Street.

Stronger-than-expected U.S. retail sales data and higher inflation figures in Canada and Britain added to the outlook for monetary policy tightening around the world, but geopolitical tensions kept the markets mostly focused on the stalemate in Ukraine.

Fed policymakers agreed it was time to raise interest rates, but any decision would depend on an analysis of inflation and other data at each meeting, as shown by the minutes of their two-day meeting at the end of January.

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“The Fed minutes reading is less hawkish, less aggressive rate hikes, at least initially,” said Tim Ghriskey, senior portfolio strategist at Ingalls & Snyder.

“The minutes are a bit more accommodating than what we heard (Fed Chairman Jerome) Powell speak at the press conference following the Fed meeting in January,” Ghriskey added.

On Wall Street, the Dow Jones Industrial Average (.DJI) fell 0.16%, the S&P 500 (.SPX) gained 0.09% and the Nasdaq Composite (.IXIC) fell 0.11%. All 11 S&P sectors at the start of the session were up except for the energy index (.SPNY), but stocks pared losses after the release of Fed minutes.

MSCI’s Global Equity Gauge (.MIWD00000PUS) reversed course to post a 0.32% gain, while its Emerging Markets Index (.MSCIEF) rose 1.23%.

Sharp earlier gains in Asian stock markets after news on Tuesday that Russia was withdrawing some troops faded in the European session, with the pan-European STOXX 600 index (.STOXX) shedding some early gains to close barely higher by 0.04%.

NATO questioned Moscow’s stated willingness to negotiate a solution to the crisis, one of the deepest in East-West relations in decades, and accused Russia of increasing its massive military buildup around the ‘Ukraine. Read more

US Secretary of State Antony Blinken backed the valuation, a prospect that lifted the price of safe-haven gold and boosted crude oil and related assets as supply would be further constrained by an invasion. Read more

“There aren’t really any signs of de-escalation. It’s probably going to firm up commodities given that supply and inventories are really low,” said Bipan Rai, head of North America currency strategy. North at CIBC Capital Markets.

U.S. crude futures rose $1.59 to settle at $93.66 a barrel, while Brent rose $1.53 at $94.81.

The Russian ruble gained 0.64% to 75.12 to the dollar as fears of immediate military action faded, for now.

Earlier, U.S. retail sales rebounded strongly in January amid a surge in purchases of motor vehicles and other goods, but higher prices could lessen the impact on economic growth this quarter. L1N2UR17V

Data showed retail sales rose 3.8% last month, nearly double economists’ consensus forecast of a 2.0% gain.

Spot gold, which on Tuesday hit its highest level since June 2021 at around $1,879 an ounce, added 0.8% to $1,867.51.

US gold futures fell 0.8% to $1,871.50.

Inflation was still a market concern as data in Britain showed consumer prices had risen at the fastest annual rate in nearly 30 years, bolstering the chances of the Bank of England raising rates for a third consecutive meeting. Read more

Canada’s annual inflation rate accelerated further in January to a new 30-year high of 5.1%, strengthening the case for a steady series of interest rate hikes. Read more

Yields on US Treasuries and Eurozone government bonds continued to decline. The yield on 10-year Treasury bills fell 0.5 basis points to 2.040%.

The two-year US Treasury yield, which generally moves in line with interest rate expectations, fell 3.4 basis points to 1.535%. Previously, it hit a low of 1.496%.

The dollar index fell 0.215%, with the euro up 0.18% at $1.1376.

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Reporting by Sujata Rao in London and Daniel Leussink in Tokyo Editing by Michael Urquhart, Will Dunham, Mark Potter, Kirsten Donovan

Our standards: The Thomson Reuters Trust Principles.

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