• richard evans

World watches Ukraine, don't forget ECB and US inflation

Good morning


Just over one week ago today I went under the knife for a shoulder operation. Well, a shoulder replacement to be precise. Quite incredible what they can do, and more incredible that I’m now sitting at my desk using both hands to type. Ok so there is quite a long road to recovery, it’ll certainly take some months, but for now I’m happy enough. It didn’t help that I tested positive for Covid while in hospital which made the nurses life difficult, and also meant I have spent the last week or so pretty much in isolation but this hasn’t really affected my recovery.


So while I have been out of action the main news of course comes out of Ukraine. Lots of headlines about how it’s not going to plan for Russia and I have no doubt it is proving harder than they had hoped, but I fear it is too easy to get caught up in propaganda while ignoring the horrendous events that are taking place. Each time I read how many Russian troops have died or how much Russian equipment has been destroyed, all I can think is what the next step is for Russia. We have seen indiscriminate shelling of nuclear power plants, US have already warned of possible chemical or biological attacks, I actually think nothing is off the table as far as Russian action goes. And that is worrying.


Meanwhile the rest of the world can do little other than watch and wait. I do feel as though Russia are trying to draw the West into the conflict, and the use of non-conventional weapons would only increase that possibility. I am reading that Fitch, the credit agency, have cut Russia’s rating amid warnings they may soon default on debt payments. RUB has weakened dramatically with USDRUB now 125.50, having been around 75.00 in mid-Feb. Sanctions appear to be taking hold, and this morning I see that Chelsea owner Abramovich has been added to the list of sanctioned individuals, along with F1 driver Mazepin and his father for close ties to Putin.


I could go on and I still wouldn’t do a good job of getting my feelings across, so I’ll leave Ukraine there for now. I hope the peace talks taking place as I type bring some good news although no one really sees any hope.


Meanwhile, closer to home I see Nicola Sturgeon has formally apologies to women who were convicted of being witches back in the 15, 16 and 1700’s. While it must have been quite appalling to have been accused and convicted of being a witch, I cannot say I have much time for formal apologies to be made for events that happened hundreds of years ago. Many people have been wronged in history, but I’m not sure we need to go back over every injustice. Her comments came, coincidentally, about the time a new BBC show, Witchfinder, hit the screens. Purely a coincidence, I’m sure, but BBC must have loved a bit of free publicity.


You’ll all be pleased to hear that my U15s continued in their winning ways last weekend with a dominant performance in the cup against another team in the division above us. Cup matches scheduled for this weekend and next weekend, we are falling further behind with league matches but hey, who doesn’t love a cup run.


With everything going on in the world right now it would be easy to ignore economic announcements and data, but do be aware we have ECB rate meeting at 12.45, with the press conference at 13.30, same time as US inflation numbers, so there is a chance we see some volatility that isn’t related to the Ukraine crisis. Early tomorrow morning we have UK GDP, industrial production, together with German inflation, so potential for a lively start to the day tomorrow as well.


Both EUR and GBP have obviously been hit by the stronger US dollar over the past week or so as risk aversion takes hold. For the record, GBPUSD currently 1.3155, EURUSD 1.1035, EURGBP 0.8385 (GBPEUR 1.1925). Gold is up at $2000 although well off the highs from a couple of days ago when we traded up to around $2070.


I’m not sure I’ll have a report tomorrow but hope to be back in action next week. As always, any questions in the meantime do feel free to ask.



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