Inflation to reach record highs in US and EU; US and UK ban Russian energy imports; Sanction’s “crater” Russia’s economy and banking system.
March 9, 2022
GBP/USD 1.3139 GBP/EUR 1.1999 EUR/USD 1.0950 USD/CAD 1.2838 EUR/CHF 1.0167 EUR/SEK 10.7797 EUR/NOK 9.7873 EUR/DKK 7.4442 USD/ILS 3.2910 AUD/USD 0.7316 NZD/USD 0.6837 USD/SGD 1.3630 USD/JPY 115.84 USD/CNH 6.3212 USD/INR 76.7938 EUR/ILS 3.6032 GBP/ILS 4.3234 USD/ZAR 15.1728
Zelensky gave a rousing speech to Westminster yesterday, taking inspiration from the wartime speeches of Winston Churchill.
UK household income will fall by roughly £1,000 this year due to inflation. Drivers are being asked to limit speed to cut back on fuel spending, with expectations on road milage to fall by 30% in 2022.
GBPUSD trades at 1.314, up 0.3% as we print.EUR
Europe has begun to rapidly untether itself from Russian oil and gas links. This will cause euro-zone economies to look elsewhere, moving its $1 billion import market to other producers, likely to force crude prices higher. This will be combined with a renewed push to develop renewable production.
Since Feb. 9 Euro Stoxx dividend futures have fallen by 23%, underperforming against the index itself.
EURUSD trades at 1.095, up 0.4% intraday.USD
US inflation may hit 10% before concluding the year at 7.5%. If 2-10 Year and 5-30 Year treasury spreads reach sub-zero levels, a recession becomes increasingly likely.
The US has enforced an oil embargo to avoid financing the ‘Russian war machine’, in what has led the way for the UK and EU to follow in avoiding Russian imports where possible.
The Fed is strongly expected to raise its rates next week, although the impact of the Ukraine war has damaged chances of a 50-bp hike. Bond markets are signalling recession as yield curves flatten.ASIA/PACIFIC
Severe flooding has hit Australia’s eastern coast with damage expected to value at $1.1 billion. Expectations of a 2022 RBA rate hike have grown and will be bolstered if April inflation data is above expected levels.
Many expect China to miss its GDP growth target, with a view that the economy will grow 4.5%. South Korea heads to the polls to elect a new president. Japan plans to increase spending to mitigate impacts of Ukraine war.ILSUSDILS trades higher 0.27% intraday at 3.294. The pair held levels above 3.3 for three short periods yesterday reaching levels not seen since July 2021.Data & Events
IT – Industrial Production
EIA US crude inventory report
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