Buckle up – the War Bag is not for the faint of heart. Kiev does not surrender after four nights of aggression. And the West, with Europe in the lead, is increasing the pressure against Putin. Having dismissed the hypothesis of a blitzkrieg, the markets take note of it. Even if a small glimmer has opened: at the dawn of the fifth day of war, the diplomatic delegations of Russia and Ukraine are about to sit down at a negotiating table in Gomel, Belarus. After an initial rejection of the ultimatum, Kiev agreed a meeting “without preconditions” and with the guarantee, by Minsk, of the safety of its delegation.
Euro Stoxx -4%, BP leaves the capital of Rosneft
The futures of the European stock exchanges anticipate a start in deep red (-3/4% the Euro Stoxx 50). The euro trades at 1,15 against the dollar (-1%). The ruble disintegrates: -28%, to 120 against the dollar, under the weight of sanctions approved by the West.
Oil shoots up, again above 102 dollars a barrel. BP has announced the exit from the capital of Rosneft, the Russian oil giant of which it controls 20%. WTI is up 6% to $96,3 a barrel. Gold +1%.
US futures are also in the red, T-Bonds at 1,89%
The impact on other squares is less strong, albeit heavy. S&P index futures fell 2,3%, as much as they gained in Friday's session. Waiting for the Fed's decisions at the next meeting on March 16 is also conditioning the US Stock Exchange. 1,89-year Treasury Notes at 7%, -XNUMX basis points.
Shanghai -0,4%, discounted for Xi's re-election
Hong Kong (-1,6%) is at its lowest level for a year. The CSI of Shanghai (-0,4%). On the ongoing war, China is keeping its distance: tonight the Chinese ambassador to the UN, Zhang Jun, said: "we support and encourage all diplomatic efforts that lead to a peaceful solution to the crisis".
The re-election of the Chinese president for his third term is expected at the annual plenary session of the National People's Congress which begins on Saturday.
Japan's Nikkei tied. Retail sales in January mark a 1,6% increase over a year ago. Preliminary industrial production fell by 1,3% in January, driven in particular by the contraction in the auto sector.
Europe cancels Moscow from Swift, except for gas
Operators, beyond the first effects of the measures, are measuring the long-term consequences of the sanctions imposed by the European Union: the selective exclusion (to avoid the gas blockade) of Russia from Swift, the interbank system of international payments; the freezing of the Russian Central Bank's foreign reserves, almost 650 billion dollars which represent a currency buffer necessary to cushion the effect of the sanctions. Brussels, moreover, has decided for the first time to finance weapons to be sent to Ukraine in response to the alert of the Russian nuclear defense system and has closed the airspace towards Moscow.
Possible crazy day for oil
According to Andrea Delitala of Pictet, there are three channels of diffusion of the crisis:
- trade relations, which will have little impact;
- financial relations, equally negligible, "considering that loans to Russia of banks in the euro area account for about 1% of the region's GDP";
- on the contrary, a 40% increase in oil prices "would lead to a reduction in growth in the euro area by half a percentage point". Not only. Equally strong will be the impact on other raw materials: palladium, aluminum, nickel, wheat and corn, which had already gone into fibrillation in recent days.
For oil, anticipate Bloomberg, it could be a “crazy day”. An OPEC+ meeting is scheduled for mid-week from which, according to Reuters, the cartel is not expected to accelerate the pace of production increases to stop the rises. President Biden is evaluating the option of putting his hand on US stocks, but according to insiders, it is above all the negotiations with Iran on nuclear power that can rebalance the market, reopening the taps from an important producer.
PMI indices, Italian inflation, Powell speaks
The war in Ukraine overshadows the rest of the economic and geopolitical agenda.
G7 finance ministers and central bank governors meet on Tuesday; the Commissioner for the Economy, Paolo Gentiloni, will also be present.
The governor of the American central bank, Jerome Powell, will be hearing in the Chamber on Wednesday; on the same day the Fed's monthly Beige Book will be published and OPEC and OPEC+ will meet.
During the week, the manufacturing and services indices for Japan, China, the Eurozone, Spain, Italy, France, Germany, Great Britain and the USA, as well as data on inflation and unemployment in the Eurozone, will be published. The Italian data expected in the next few days concern February preliminary inflation and GDP 2021 (Tuesday), the unemployment rate in January (Thursday) and the economic accounts for the fourth quarter.
