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.
This article is intended for U.S. audiences only.
©2022 SVB Financial Group. All rights reserved. Silicon Valley Bank is a member of the FDIC and the Federal Reserve System. Silicon Valley Bank is the California bank subsidiary of SVB Financial Group (Nasdaq: SIVB). SVB, SVB FINANCIAL GROUP, SILICON VALLEY BANK, MAKE NEXT HAPPEN NOW and the chevron device are trademarks of SVB Financial Group, used under license.
The views expressed in this email are solely those of the author and do not reflect the views of SVB Financial Group, or Silicon Valley Bank, or any of its affiliates. This material, including without limitation the statistical information herein, is provided for informational purposes only. The material is based in part upon information from third-party sources that we believe to be reliable, but which has not been independently verified by us and, as such, we do not represent that the information is accurate or complete. The information should not be viewed as tax, investment, legal or other advice nor is it to be relied on in making an investment or other decisions. You should obtain relevant and specific professional advice before making any investment decision. Nothing relating to the material should be construed as a solicitation or offer, or recommendation, to acquire or dispose of any investment or to engage in any other transaction.
Foreign exchange transactions can be highly risky, and losses may occur in short periods of time if there is an adverse movement of exchange rates. Exchange rates can be highly volatile and are impacted by numerous economic, political and social factors, as well as supply and demand and governmental intervention, control and adjustments. Investments in financial instruments carry significant risk, including the possible loss of the principal amount invested. Before entering any foreign exchange transaction, you should obtain advice from your own tax, financial, legal, accounting and other advisors, and only make investment decisions on the basis of your own objectives, experience and resources.