Morning Brew February 22 2022
Senior Relationship Manager
Summary: Ukraine Escalation Drives Risk Off Sentiment
Vladimir Putin on Monday formally recognized two regions in eastern Ukraine and ordered troops to enter them, Reuters reports tanks moving into Donezk. The US said to be imposing sanctions on Russia for” this clear violation of international law and Ukraine sovereignty and territorial integrity," Linda Thomas-Greenfield, U.S. ambassador to the United Nations, stated.
Risk off sentiment is the key sentiment with Indexes falling severely. Dax drops to 14450, the Nasdaq below 14k at 13700 , the US500 4280 and the Dow to 33600.
Gold and Silver gain to 1911 and 24.20, EURCHF falls to 1.0350 and the yen also gains.
Ruble falls to 80 and Russian stocks drop on the expectation of sanctions if not war, Oil gains app. 2%, the Dutch TTF Gas contract adds more than 10%.
EURUSD drops to 1.1290, GBPUSD to 1.3580. Bitcoin falls to 36600
Besides the Ukraine, the key piece of news yesterday was the German producer price at 214.2%, the highest since the inception of the D-Mark
Be extremely cautious today the market is likely to move fast on any news either direction. We can also soon expect comments out oaf central banks on any measures to calm markets or price reactions on the back of the Ukraine conflict.
Physically Settled Futures:
RCH2 will expire 22nd February at 10:00 GMT
CLH2 will expire 22nd February at 16:00 GMT
CGBH2 will expire 24th February at 16:00 GMT
NATGASUSMAR22 will expire 22nd February at 16:00 GMT
SUGARNYMAR22 will expire 24th February at 16:00 GMT
Key Events this Week:
Tuesday: German IFO, US PMI
Wednesday: EU HICP
Thursday: US GDP New Home Sales
Friday: German GDP, EU Consumer Confidence, Durable Goods Orders
Tuesday: HSBC, Home Depot
Wednesday: Rio Tinto, Iberdrola, Stellantis
Thursday: Safran, Anheuser Bush Inbev, Axa, Deutsche Telekom, Royal Bank oc Canada. Alibaba, Moderna, Newmont Mining
Saturday: Berkershire Hathaway.
Latest Market Insights
Q4 Outlook 2022: Winter is coming
- Winter is coming to the financial markets as central banks are tightening their grip. How spring will look is still a question.
European energy crisis: it will get worse before it gets betterThe winter in Europe will be tough, but whether the result is political chaos or sustainable, innovative solutions is still undecided.
A difficult and volatile quarter awaitsAs the year draws to an end, commodities continue to be at centre stage of the world with growth pockets political uncertainty.
The bright side: crises drive innovationThe positive spin on crises is that they come with solutions. It is worrisome that deglobalisation may be a response to this crisis.
Green transformation in China: renewable energy and beyondGoing green, China needs to span numerous energy sources to ensure stability, as every source comes with a challenge.
Asia: Intermittent solutions, but a faster renewable adoption curveAsian energy supply is being squeezed. This and the adoption of renewables may change the investment sentiment in the region.
FX: A Fed thaw needed to deliver a sustained USD turn lowerThe US Dollar can keep momentum when the Federal Reserve continues to tighten, leaving the rest to play to their drum.
Autumn can become ugly for equities and bond holders. Comfort for Dollar longsTechnical analysis suggests that equities could face a tough Q4 as could fixed income. US Dollar positions could provide some upside.
The next stock market sector to watch, with stocks going nuclearAs the world scrambles to find affordable, sustainable energy, nuclear is getting attention from politicians and investors alike.
The crypto space is getting cold when the hype disappearsCryptocurrencies face a winter of their own as retail investors and governments are asking tough questions.