Oil continues to surge higher with WTI futures climbing another 6.6% overnight, topping $110 per barrel. The rule-of-thumb impact on inflation is that for every $10 increase in oil price, inflation heats up another 0.4-0.5%. Russia comments they are ready to continue peace talks with Ukraine, despite continued military aggression. Countries and companies all over the world continue to isolate Russia economically and politically.
"War is a defeat for humanity. "
March 2, 2022
EUR/USD 1.1096 GBP/USD 1.3340 USD/CAD 1.2675 AUD/USD 0.7268 USD/JPY 115.48 USD/CNH 6.3266 USD/ILS 3.2351 USD/MXN 20.7840 USD/CHF 0.9213 USD/INR 75.7100 USD/BRL 5.1518 USD/SGD 1.3572 USD/DKK 6.7050 USD/SEK 9.6945 USD/NOK 8.8890
The dollar is mixed – lower versus commodity currencies and higher against the euro, pound and yen. Fed Chair Powell begins testimony today and presents an economic summary in the Fed's Beige Book this afternoon. The US State of the Union last night highlighted Russia and US infrastructure. President Biden remained steadfast that Russia will pay a price for their invasion into the Ukraine. On inflation, he vowed to get prices under control and urged corporations to work to lower costs – not wages.GBP
The UK pound trades around YTD lows near $1.33. Gilt yields edge slightly higher on improved risk tone. Traders have lowered expectations for aggressive BoE rate hikes.EUR
Euro trades around $1.11 after touching a YTD low at 1.1060. The euro is expected to remain under pressure from the Ukraine crisis and from expectations that the ECB will delay interest rate hikes until calm is restored.CADThe Bank of Canada hiked rates this morning by 25 bps to 0.50%, as expected. The Canadian dollar edged higher and sits at the top of the FX leaderboard for overnight performances.ASIA/PACIFIC
USD/JPY moves higher as US Treasury yields and oil prices rise.
China has signaled that they are distancing themselves from Russia’s actions. China's foreign minister said that they are extremely concerned about citizens in Ukraine being harmed.
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