We start a week more focused on the conflict between Russia and Ukraine, with the Russian offensive this time concentrating its efforts in the Donbass region, although the Russian army is not achieving its objective. Meanwhile, Ukraine has a commitment from the US to send them more weapons in order to continue defending the country’s main cities. Yesterday there was a meeting between Austrian Chancellor Karl Nehamme and Vladimir Putin, in order to advance the negotiation process, since up to now it seems stalled. The High Representative of the European Union for Foreign Affairs, Josep Borrell, stated that the EU member countries should send the weapons requested by Ukraine in a matter of days, with the aim that Ukraine can fight against Russia’s new military campaigns focused on in the eastern part of the country. The Bank of Russia yesterday lowered its reference rate by 300bp to combat external conditions, due to the sanctions imposed. Also from yesterday they will allow people to withdraw dollars or euros from their accounts, as well as banks to sell currency in cash to individuals from April 18. In the foreign exchange market, during the day last Friday the price of the EUR/USD pair moved in a range of 1.0836-1.0892, to end up closing the session in European time at levels of 1.0877, below of the psychological level of 1.09. The interest rate on the 10-year US bond continued with the recent increases, closing the week at 2.70%. The euro appreciated considerably against the Japanese yen, to 135.30, while the community currency appreciated more timidly against the pound sterling, to levels of 0.8348. Let us remember that this Thursday a new ECB meeting is being held, and as the weeks go by it seems that we are getting closer to the most severe scenario that the entity proposed after the March meeting (GDP growth of 2.3% and inflation of 7.1% in 2022). No important announcement is expected after this meeting, except for a review of the economic outlook due to the increase and persistence of inflation, as well as the impact of the war on the economy. In the absence of new material information on the economic impact of the war and given the great uncertainty, it is possible that the ECB leaves its options open and the council is likely to continue on its normalization path, adjusting to the QE exit times. which was announced in March. The minutes of the previous meeting reflected the classic division of the members of the European Central Bank, among which are those in favor of accelerating the exit process, given the inflationary pressure, and those in favor of waiting until they are more certain of the final impact of the war on the economy. The market is already pricing in 50 bps of rate hikes by the end of the year and an additional 125 bps in next year 2023. ECB President Christine Lagarde will surely comment that the timing of rate hikes will continue to depend on the data. On the other hand, on Friday the possibility was filtered that the ECB is working on some mechanism that helps reduce the expansion of peripheral debt in situations of volatility. Until now, the ECB had expressed its willingness to use all the flexibility of the available tools (purchasing programs) to do so. The anticipation of the end of the PPP program would be leading the ECB to consider a new tool whose implementation and conditionality are still very uncertain. INFORMATIONTitleUkraine urges the US and Europe to send new weapons to fight the Russian armyDescriptionWe begin another week focused on the conflict between Russia and Ukraine, with the Russian offensive this time concentrating its efforts in the Donbass region, although the Russian army is not achieving its goal. Author GLOBALCAJA
Ukraine urges the US and Europe to send new weapons to fight the Russian army
