Posted on March 1, 2022 We begin another week with the world pending the evolution of the already more than declared Russian invasion in Ukraine. Regardless, it looks like Russian President Vladimir Putin might be left alone as Ukraine is holding out, which could bring about Putin’s downfall, though not immediately. Some oligarchs are already beginning to take a stand against the intervention and a Chinese bank in Singapore has refused to issue letters of credit for the export of Russian oil, which could mean that China is distancing itself from Putin. Although China will continue to support its exports, it seems that it has reduced its dialectical support. Given the sanctions applied to Russia, the country’s Central Bank claimed to be capable of maintaining financial stability, even though its international assets were frozen and the partial exclusion of the SWIFT system and all that this entails, focusing its strategy on the contribution of capital and liquidity. through unlimited repos and the continuity of its own transfer system (SPFS). Despite these efforts, the ruble plummeted more than 28% and the stock market delayed its opening for three hours. Along these lines, the risk rating agency Standard & Poor’s was the first agency to review Russia’s rating from BBB- to BB+. Raw materials continue to shoot up, oil rose 5% due to the risk of lack of supply, since Russia represents 10% of world oil and 40% of gas in Europe. In addition, it is the largest exporter of cereals and fertilizers in the world, the first producer of palladium and nickel and the third largest exporter of coal and steel. In the foreign exchange market, we began the day on Friday, with the echo of the words of Joe Biden on Thursday, where he guaranteed that there would be no direct involvement “in situ” of either the United States or its allies in Ukraine. These statements allowed a certain recovery of risk assets, allowing the green to return to the stock markets and bringing the yield of the US ten-year bond back to levels above 2%. Safe haven currencies were gradually losing ground against the euro, closing at levels of 1.1268 (USD), 130.25 (JPY) and 1.0434 (CHF), but this situation turned around over the weekend when the United States and its allies announced new sanctions against Russia. Among these sanctions, the impossibility of access to SWIFT stands out, both for the Russian Central Bank and for different commercial banks, notably hindering Russia’s access to capital markets. The news has been happening and among them stood out the announcement by Russia of the alert of the nuclear forces, notably escalating the tension in all the territories. Fear and uncertainty returned to the markets with the USD currently trading against the Euro at 1.1160, the JPY at 128.95 and the CHF at 1.0335, stock futures trading in the red and the US 10-year bond making a comeback. at 1.90%. In the public debt market, last week we could see how it seemed that a total scenario like the one that is taking place had not been discounted and with it the possibility that the war would change the course of the European Central Bank. However, the scenario of an accelerated exit from the current monetary policy that had been discounted has been fading away. Last week we learned how some of the members who most advocated a rate hike have been quick to back down, alluding to the possibility of slowing down the exit process given the uncertainty of the impact of the war. All of this has meant that the scenario of two rate hikes and the end of the purchase program in July can be slightly moved away. In addition, the president of the entity Christine Lagarde appeared on Friday to confirm the ECB’s ability to take the necessary measures to guarantee financial stability. All the attention of the markets will continue in Ukraine and the implications of the new sanctions that may be imposed on Russia, as well as in the possible dialogue to agree on a ceasefire. INFORMATIONTitleClick here to find out all the economic details about the Russian invasion in UkraineDescriptionWe begin another week with the world pending the evolution of the already more than declared Russian invasion in Ukraine. Regardless, it looks like Russian President Vladimir Putin might be left alone as Ukraine is holding out, which could bring about Putin’s downfall, though not immediately. Author GLOBALCAJA
Click here to know all the economic details about the Russian invasion in Ukraine
