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Commodities Surge, Russian Advances; Powell Testimony


© Reuters

Geoffrey Smith — Commodity markets have soared to new multi-year highs due to the difficulties of replacing Russian energy supplies and grains to international markets. OPEC expects to continue its steady path, despite the fact that it has resisted U.S. calls for a greater increase in oil production. Jerome Powell, Fed Chair and representatives of European Central Banks will discuss the effects of war in Ukraine on inflation and monetary policies. Inflation in the Eurozone rises to 5.8% ADP publishes its monthly statistics on U.S. Private-sector employment. What you should know regarding financial markets, Wednesday 2nd March.

1. Commodities surge

Prices for oil and natural gas have soared, with European natural gas prices reaching new record highs. This was due to concerns that Western sanctions would impact Russia’s exports.

At 6:30 AM ET (1330 GMT), futures had risen 4.9% to $108.44/barrel, and 5.3% to $110.48/barrel by the time of writing. These were.

This is ahead of a meeting between Russia, OPEC countries to determine April output levels. They are expected to to raise output by a notional 400,000 barrels a day, the U.S.’s traditional Gulf allies having resisted U.S. diplomatic pressure for a larger increase.

Each week, the weekly reports are due at 10:00 AM ET as per usual.

Other commodities, such as those from Russia or Ukraine, are experiencing price spikes. Prices rose by as high as 7.6%, which is the highest level since 2008. However, prices in Paris rose an astounding 7.5% to an all time high.

2. Russian economy faces difficulties due to private sanctions

The imposition of official sanctions is being reinforced by a growing number of international companies cutting their links with Russia, a development that threatens to dampen global growth in the short term as well as restricting Russia’s medium-term economic potential.

The world’s largest shipping companies – Maersk, Hapag-Lloyd, MSC and CPM – have all said they will halt all non-humanitarian shipments to Russia, while Apple (NASDAQ:) said on Tuesday it will halt product sales there and suspend services such as Apple Pay. Visa (NYSE:) and Mastercard (NYSE:) have restricted Russian banks’ access to their networks.

Russian Central Bank chief Elvira Nabiullina was quoted by newswires earlier as saying that the Russian economy is in an “extreme position”. Before retracing, the reached a record-breaking high of 109.59 Rubles. Trading on Moscow’s stock exchanges remained suspended for a third day. As investors anticipated a greater impact to the Eurozone economy, the dollar rose 21 months to its highest point against the.

3. Powell will testify. Lane and Nagel weigh in.

The head of the U.S. Federal Reserve and the European Central Bank’s chief economist will speak later, amid growing expectations that they will water down their plans to tighten monetary policy in response to the latest developments.

Witnesses will be called before the House Committee on Financial Services on October 10, at 10 AM ET. The ECB’s chief economist is scheduled to speak at 11 AM ET.  Joachim Nagel from Germany’s central bank stated that German inflation would be higher than expected this year. He also suggested that a response to monetary policy should be taken.

According to earlier data, February saw a 5.8% increase in annualized GDP, much more than was expected at 5.3%.  The U.S. data calendar for Wednesday is dominated by the report for February, which is expected to iron out last month’s blip of a 301,000 drop in private jobs.

4. U.S. stocks set for modest rebound; Salesforce, Dollar Tree and SoFi eyed

U.S. stock markets are set to open moderately higher later, recouping less than half of Tuesday’s losses.

They were at 6:15 AM ET up 198 points (or 0.6%), while they were slightly higher in parallel. NASDAQ 100 Futures had a slight outperformance with a gain 1.8% All three major cash indices lost 1.5% to 1.8% Tuesday.

Stocks likely to be in focus later include Salesforce (NYSE:) and SoFi (NASDAQ:), both of which posted stronger-than-expected results after the close on Tuesday. , , and head Wednesday’s roster for earnings releases.

5. Russian troops are supported by artillery fires on cities as they advance.

The conflict in Ukraine continues, with the Ukrainian government denying earlier reports (Russians) of new peace negotiations.

The mayor of Kharkiv, the country’s second city, was quoted by newswires saying that Russia continues to launch indiscriminate rocket artillery strikes against it. Russia’s Defense Ministry claimed that its forces had taken the southern city of Kherson and made further progress in creating a ‘land bridge’ between eastern Ukraine and Russian-held Crimea. It would allow the Russian military to move closer towards the eastern Ukrainian government troops. 

More than 600,000 people have fled Ukraine to seek refuge in neighboring countries, including Poland, Hungary, Moldova, and Romania, according to UN estimates. These countries have high trade exposures to Ukraine and their currencies are still under severe pressure.