Morning Brew March 24 2022

Good Morning,

Rising oil prices, rising inflationary concerns , high yields and lack of any progress in Ukraine weighed on equities and risk sentiment yesterday. Several Fed Members signaled a hawkish stance.

US Indexes gave up a little more than 1% and the Dax index fell back to 14200 before rising to 14330.

EURUSD fell back to below 1.10 to currently trade at 1.0975 and GBPUSD 1.3185, the USD Index is at 98.85. USDJPY remains above 121 and Gold and Silver 1940 and 25.00. US  Yields paused and fell to 2.30 after reaching 2.40 yesterday.

Western leaders are starting their meeting in Brussels where we are expecting new sanctions on Russian leaders and need to watch carefully for an agreement to ban Energy imports from Russia altogether.

Russia has announced that starting next week “unfriendly” states will have to pay for their gas imports directly in Rouble – effectively requiring a circumvention of the central bank sanctions. The USDRUB fell to 90.75.

UK oil, is trading at 122 USD, up 25% in the last two weeks.

What do we watch for today? Most important will be any decision out of Brussels, next to that today hast he busiest schedule for economic data this week.

PMI will be released through he day: 9:15 France, 9:30 Germany, 10:00 EU 10:30 UK and 14:45 US.

At 9:30 the Swiss national Bank will announce rates with no change expected, 13:30 brings US Labor data an the Durable goods orders.

The US are dropping tariffs on more than 300 Chinese products, more than 500 had been expected, so the news are not as positive as the headline suggests.

Several companies are stopping or reducing activities in Russia, including Nestle and Renault,.

Continue to trade carefully and expect strong moves on news surrounding Ukraine and consider optionality vs direct exposure.