Sujata Rao gives a look at tomorrow’s markets

The tragedy that is the fleeing of Ukrainians from bombed cities makes all other problems irrelevant.

Some are suffering from damage of another kind, including near worthless Russian Securities on Investors’ Books and soaring commodity Prices that will cause consumers to pay more for their groceries and other energy.

These ripple effects have not stopped.

Wall Street and Europe are both showing signs of decline after the worst stock market day since October 2020. European banks have seen a 25% drop in share value since mid-February. An earnings slump seems inevitable.

Capital Economics thinks the next move, which is a ban of Russian energy imports, will make things worse. Capital Economics estimates that this would push (currently about $120) up to $160 per barrel and European up to 300 euro/megawatt hour down from the 215 euros.

Europe, as well as several emerging economies, would fall into recession.

Europe has resisted the ban but Brent is still jumping $4 per barrel. Prices continue to climb for the green transition, from nickel to steel and aluminium used in wind farms to nickel to make electric vehicles batteries.

According to estimates, supply chain problems may have pushed the average price of new vehicles in America almost five times higher than they were a year ago. This could be a bigger hit in Europe, as almost half the nickel in Germany comes from Russia.

Economist data are outdated due to the rapid pace of events and fluctuations in commodity prices. They can be useful for predicting what may come. Data showed that the largest current account deficit in Japan since 2014 was caused by oil imports.

The U.S. February CPI is due Thursday at 7.9%. However, last week’s fastest gasoline price rise in 17 years could mean that the March print will be even higher.

The central banks are now faced with the growing-inflation dilemma. Two-year German “breakevens,” a gauge of future inflation, are the most prominent policy alternatives in the Euro zone. They have now soared to more than 5%.

Commodity prices https://fingfx.thomsonreuters.com/gfx/mkt/egvbkqbonpq/Pasted%20image%201646687011742.png

There are key developments which should give more direction to the markets Tuesday

Kuroda of the BOJ rules out tightening policy to reduce cost-push inflation

German Industrial Production Rises in January

-U.S. trade balance/inventories

The central bank of Poland meets.