Fed reassures investors on US stability despite long term impacts of Russo-Ukraine conflict; Russia stocks cut from equity indexes; the war will amplify global inflation woes adding 3%; Long-term outlook for a weaker euro.
March 3, 2022
GBP/USD 1.3384 GBP/EUR 1.2070 EUR/USD 1.1089 USD/CAD 1.2617 EUR/CHF 1.0195 EUR/SEK 10.7795 EUR/NOK 9.8580 EUR/DKK 7.4399 USD/ILS 3.2365 AUD/USD 0.7308 NZD/USD 0.6781 USD/SGD 1.3581 USD/JPY 115.72 USD/CNH 6.3230 USD/INR 75.8613 EUR/ILS 3.5887 GBP/ILS 4.3313 USD/ZAR 15.3149
The BoE warned that European conflict could upend the UK economic outlook, suggesting the war will stunt growth, and depress value for riskier assets. The Ukraine conflict has potentially highlighted the limitations of separation from the EU, on the geopolitical stage the necessity for UK-European collaboration is evident.
The FTSE has opened higher 0.31% as we print, GBPUSD trades lower by -0.1%.EUR
The outlook for the Euro is suggested to be poor, as Russia’s invasion pulls at the currency’s weaknesses. EURUSD has already declined -2.5% YTD, and if yield differentials between the dollar and euro widen, it could fall even lower. Impeded economic growth combined with spiraling inflations only mounts to the ECB’s issues on deciding when to withdraw stimulus and hike rates, knowing that divergence from FOMC policy will exacerbate issues.
European countries continue to commit lethal and non-lethal aid to the Ukraine conflict, as European nations rearm and pledge to meet NATO GDP requirements for the first time in decades.USD
The Fed’s Jerome Powell, warned of the serious effects to be felt in the US and globally due to Ukraine, he eased concerns and pushed US futures and the dollar higher, stating that it is likely the Fed can achieve a ‘soft landing’.
Key democratic senators also highlighted the potential revival of Biden’s economic agenda, if it were slimmed down.
The Bloomberg commodity index is on track for record weekly gains, as uncertainty over Ukraine spurs demand for fuels and metals.ASIA/PACIFIC
As Xi Jinping prepares for his third term, he is posed with new issues facing China. China faces the weakest growth in decades, a property crisis and poor investor confidence in Chinese markets which will require a different approach from Beijing.
Hong Kong’s PMI fell to 42.9 in February, the lowest since April 2020, likely due to widespread and draconian covid restrictions.
Asia equities were mostly finishing positive during today’s Asian session. The Nikkei closed up 0.7% as well as the Hang Seng up 0.55%. The CSI closed down -0.6%.ILS
USDILS trades up 0.4% intraday at 3.233. As daily volatility exceeds 1%, at an average of 1.14%.
February saw a change in trend direction, with February prices significantly exceeding January prices, as USDILS appears to bounce between 3.2 and 3.25.Data & Events
Second round of talks between Russia and Ukraine.
EU, UK – Markit Services, Composite PMI
EU – Jan PPI, Jan Unemployment
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