Geoffrey Smith 

Investing.com — Analysts expressed doubt about the Federal Reserve’s guidelines, which led to a global stock rally that ended. Expect the Bank of England to join the Fed by hiking later. Russia sent reinforcements thousands of miles away in support of its troops fighting in Ukraine’s civil war. The latest data on housing starts and jobless claims are out, while oil prices have risen to $100. These are the top financial market news stories for Thursday 17th March.

1. Fed’s rally fades, jobless claims and housing starts are due

Global markets struggled to extend the gains they made in the wake of the Federal Reserve’s decision to raise U.S. interest rates for the first time in three years, amid skepticism at the assumptions behind the central bank’s guidance.

The Fed’s ‘dot-plot’ of expected rates over the next three years foresees at least another six quarter-point raises, but its economic analysis foresees no real rise in the jobless rate – something that would be a contrast with previous tightening cycles.

The U.S. yield curve flattened in the bond market, which is a sign of an impending economic slowdown. That’s unlikely to be reflected much in today’s data, however, which should reflect continued strong growth. In addition to weekly jobless claims, and housing starts and building permits data for February at 8:30 AM ET, there will be industrial production at 9:15 AM ET, as well as the Philadelphia Fed’s monthly business survey.

2. Russia declares it paid its debts, escalating the war rhetoric

Even though ceasefire talks were ongoing, war in Ukraine escalated after the U.S. agreed that it would send $1 billion more in military support to counter the Russian invasion. U.S. President Joe Biden called Russia’s Vladimir Putin a ‘war criminal’, something that – by definition – will make negotiating with his regime harder.

Putin responded with a televised attack on domestic resistance to his war, calling his opponents ‘scum and traitors’ and saying that he looked forward to a ‘healthy and necessary cleansing’ of Russian society. Vedomosti, a newspaper reported that Russia’s demand for flight tickets rose 650% over the past year. 65% of flights booked were one-way.

Video footage from open-source suggests that Russia has begun to send large-scale reinforcements into Ukraine via the Far East, the Caucasus and elsewhere.

Western hopes to convince China and India to join the condemnation of Russia’s attack were again thwarted, with China angrily rebutting suggestions by NATO Secretary General Jens Stoltenberg that it should distance itself from its ally.

Elsewhere Russia’s central bank said it had made an interest payment on the country’s foreign debt, but there has still been no confirmation from bondholders that they have been paid in dollars, as required.

3. As the yield curve flattens, stocks will open at a lower level

U.S. stocks are set to open lower later, with Wednesday’s relief rally quickly running out of gas.

At 6:15 AM ET (1115 GMT), the points were down by 146, or 0.4%. They were also down 0.5%, and down 0.6%.

The Dow had risen 1.6% on Wednesday in response to the Fed’s decision and guidance, while the S&P had risen 2.2% and the 3.8%.

After rising as high as 2.244% on Wednesday, the benchmark bond yield of the 10-year was down to 2.12%.

Stocks most likely to focus on later include Dollar General and Accenture (NYSE;), both of which report earnings earlier than FedEx (NYSE).

4. Bank of England raises interest rates

Worldwide central bank actions continue, with many expecting the Bank of England to increase its key rate by 0.2% more later. This will mark the third consecutive hike at the BoE’s meeting. The BoE, which faces both overshooting inflation as well as a strong labor market, is expected to raise its key rate by 0.25%.

Christine Lagarde of the European Central Bank was clear in her keynote address that the conflict in Ukraine might lead to new inflationary trends. She also stressed the need for gradual interest rate increases by the ECB.

European economies are under more pressure than the U.S. due to rising energy prices and interruptions in vital industrial inputs from Russia or Ukraine, causing plant productions such as car manufacturing and chipmaking to stop.  In February 2016, the EU saw a 6.7% drop in vehicle sales, an unprecedented low even before the effect of war.

Elsewhere, the Brazilian central bank followed the Fed’s action by raising its key rate a full percentage point on Wednesday.

5. The price of oil has fallen to $100, nickel volatility continues

As the prospect of a rapid peace in Ukraine seemed to fade, crude oil prices rose.

At 6:25 AM ET the price of a barrel was at $99.42, an increase of 4.6%, and futures at $102.51 were up 4.7%.

Boris Johnson, the U.K. Prime Minster, returned from his trip to Saudi Arabia, United Arab Emirates and Yemen empty handed. He had been hoping to convince their governments to boost oil production.

Volatility was also evident in other commodity markets, such as the London Metals Exchange which had to stop trading nickel futures nearly immediately after opening.