Good morning
The Ukraine crisis continues to be the main focus of attention. I’m not sure its going as planned for the Russians but lets be honest, that doesn’t make it good for Ukraine. Further sanctions continue to be placed on Moscow, with some Russian banks having access to Swift removed. USDRUB which through end 2021/early 2022 was sitting around the 74-76.00 area, traded up to almost 110.00 this morning before the Russian central bank almost doubled rates to 20%. Equity markets has a reasonable day Friday but futures prices suggest large losses when they open this morning, even though Asian markets held up overnight.
The fears of escalation are clear. Putin has ordered his nuclear forces on high alert, the West is sending more arms to Ukraine, talk of Putin turning off Europes gas supplies, more sanctions. Putin makes threatening comments over Finland should they join Nato. Belarus may send troops to Ukraine to support Russia, although there is some talk of a possible meeting between Ukraine and Russia on the Belarus border which, while its unlikely to yield any significant results, is perhaps a step in the right direction. Putin may feel he is being backed into a corner which makes him even more dangerous.
Currencies have seen some reasonable ‘risk-off’ moves. EURCHF gapped lower overnight from 1.0435 to alow just above 1.0300, now 1.0345. EURJPY saw a similar shift lower from 130.20 to 128.70, now 129.15. US dollar is stronger across the board, EURUSD dropped from 1.1270 to 1.1120, now 1.1180, while GBPUSD fell from 1.3410 to 1.3310, now 1.3370. EURGBP has also seen some volatility, the pair traded up to 0.8405 (GBPEUR 1.1895) on Friday but has traded back to 0.8350 (1.1975) this morning as EUR bears the brunt of some risk-off selling. Interestingly, Gold has seen slightly limited volatility since its roller coaster moves last week. It had traded to $1975 before dropping almost $100 to $1880. It did trade to $1930 overnight but is back to the $1900 level as I type.
RBA rate announcement due in the early hours of tomorrow morning. No change in policy expected, and I’m still thinking they will do their best to sound dovish as they did last time, even though it is expected they will begin to normalise rates later this year. Look for comment that they still commit to full employment, and deviation from this could send AUD higher
I am pleased to report some good news over the weekend. Spurs won, Englands rugby team just about beat Wales, but of course the highlight was my u15s putting on a dominant performance to win 5-0 to give us three league points. With the score 4-0 at half time I moved players around for the second half, playing two strikers at centre back and defenders up front, which served to keep the scoreline sensible. It was one of my defenders who scored our only goal of the second half. The ability to compete even though we are not playing our strongest team shows just how much this lot have improved. Another cup match next weekend to look forward to.
However I am unlikely to be present for that match. As I mentioned Friday, I go under the knife tomorrow for a shoulder replacement and I’m likely to be out of action for a few days. To be honest I have no idea of the recovery times, but I’ll apparently be in a sling for a few weeks while the whole thing settles down. Can’t say I’m looking forward to it, but needs must. For the coming week there is likely to be no morning reports, and please don’t expect speedy replies to emails you send me but do copy in Mark Henry and he’ll be able to help.
- 13.30 US wholesale inventories, goods trade balance
- 13.30 CAD current account
- 14.45 US Chicago PMI
- 01.00 China manufacturing, non-manufacturing PMI
- 01.45 China caixin manufacturing PMI
- 03.30 RBA rate annoucement
- 07.00 German retail sales
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