Posted on March 29, 2022 We started the last week of March with the panorama quite similar to how it started. The conflict between Russia and Ukraine is forcing the European Union to seek solutions to the lack of a large volume of agricultural products, which is leading to sharp increases in prices and large losses for the sector. Among the different measures implemented, the activation of the CAP crisis reserve worth 500 million euros stands out. Ukraine and Russia begin today in Turkey a meeting that will last three days, the Ukrainian president Zelensky has been open to talk about the neutrality status of the country, as part of a peace agreement with Russia if it withdraws its troops from the territory. Along these same lines, the United Kingdom was also willing to lift the sanctions imposed if Russia decides to withdraw its troops from Ukraine. The war between Russia and Ukraine has caused the indices of economic prospects of the population in Europe to collapse. The German IFO for business confidence in March was 90.8 points, marking the lowest since January 2021 by falling below the estimated figure of 94.2 points and the February figure of 98.5 points. UK retail sales in February posted 7% year-on-year growth, below expectations
of analysts (7.8%) and the figure for the previous month (9.4%). The UK consumer confidence index in March was -31, in line with the market consensus (-30), but far from the figure for the previous period (-26). The data forecast for this week suggests that the monthly increase in gasoline prices could be the highest on record, caused by the increase in oil prices, amid the conflict between Russia and Ukraine, despite measures to protect consumers from higher prices. Energy continues to be the main driver of inflation, with core inflation expected to rise from 2.75% to 3.1%. On the other side of the Atlantic, the appearance of Jerome Powell (president of the FED) at the conference of the National Association for Business Economics stood out last week. Said intervention was very illuminating of what is to come and a confirmation of the hawkish turn of the Fed when it was surprised by inflation. In short, the entity will give priority to instruments to contain inflation, especially at a time when the economy continues to perform well and the labor market has almost reached full employment. Therefore, an acceleration in the rate hike process is expected, discounting an upcoming 50bps hike at the meeting on May 4, until reaching neutrality and even entering restrictive territory if necessary to quell inflation. INFORMATIONTitleThe Russian invasion in Ukraine depletes Europe of agricultural products DescriptionThe conflict between Russia and Ukraine is forcing the European Union to seek solutions to the lack of a large volume of agricultural products, which is leading to sharp increases in prices and substantial losses for the sector. Author GLOBALCAJA