February 16. Inflation in the UK has reached an almost 30-year high of 5.5%

UK consumer prices rose at their fastest annual pace in nearly 30 years in January, putting more pressure on households and increasing the chances that the Bank of England will raise interest rates for the third consecutive meeting. Since December, the regulator has already raised interest rates twice: from 0.1% to 0.5%. Analysts expect that the rate may be increased to 0.75% or 1% as early as March. 

According to the Office for National Statistics, the annual rate of consumer price inflation rose to 5.5% – the highest level since March 1992. Analysts predicted that inflation would remain at the December 5.4% level. 

Core inflation (excluding volatile prices for energy, food, alcohol and tobacco) rose to 4.4% in January from 4.2% in December, which is the highest since 1997.

Earlier this month, the Bank of England revised its inflation forecasts and assumed that inflation would peak at around 7.25% in April (amid a 54% increase in electricity costs). High energy prices have so far been the strongest contributor to rising inflation in the UK, although supply chain problems have also driven up prices for many other goods.

The British central bank does not expect inflation to return to the 2% target until early 2024, although most economists believe that inflation will still fall faster.

The UK is not alone in the sharp rise in the cost of living. Consumer price inflation in the US reached a 40-year high of 7.5% in January, while inflation in the eurozone was 5.1% (which is the highest since the creation of the single European currency).

February 17. Oil prices are highly volatile on news of negotiations with Iran

On Thursday, the price of oil accelerated its decline amid expectations that the United States and Iran will soon be able to return to a nuclear deal that will allow Iranian oil to come back to the world market. 

April Brent futures declined during the day to the level of $91.40 per barrel, recovering later to $93.35. WTI crude oil fell to $90.30, also recovering during the day to $93.15 per barrel. 

Yesterday it became known that the parties in the negotiations on the nuclear program are «closer to an agreement than ever.» This was stated by the chief negotiator from Tehran, Ali Bagheri Kani, on Twitter.

In addition, Iran and South Korea held a meeting of representatives of oil refining companies to discuss possible supplies, which suggests that Iran is definitely preparing the ground for a return to the market.

Experts note that the positive dynamics of negotiations between the United States and Iran somewhat calms the oil market. And although there is no agreement yet, prices are declining on the news of progress in negotiations and expectations of a potential return to the oil market in the amount of up to 900 thousand barrels per day by December.

At the same time, today oil prices are supported by another increase in geopolitical tensions due to the situation on the Ukrainian border. The White House said yesterday that Russia had increased the concentration of troops on the border by an additional 7 thousand people.

February 22. Germany decided to block Nord Stream 2

German Chancellor Olaf Scholz announced the suspension of the Nord Stream-2 certification after Russia recognized the independence of the Donetsk and Lugansk People's Republics (DPR and LPR).

In addition to the announcement of the blocking of the project, Scholz announced a decision on the first package of additional sanctions against Moscow.

Against the background of this news, the cost of gas in Europe has started to rise sharply. The current quotes of «blue fuel» are again located near the level of $1,000 per thousand cubic meters. 

Recall that the Nord Stream-2 gas pipeline was planned to be put into operation at the end of 2019. At the same time, Ukraine, Poland, the Baltic states, as well as many European countries opposed the new supply route. Opponents of this Russian project have repeatedly stated that the gas pipeline is not an economic project, but a geopolitical lever of Russia's influence on Ukraine. 

However, Russia has repeatedly denied these claims, emphasizing the need for reliable gas supplies to European countries, which the Ukrainian gas transportation system cannot provide.

In September 2021, the pipeline was fully completed, after which an application for certification was submitted. However, today Germany still refused the certification process against the background of a sharp deterioration in the geopolitical situation on the border with Ukraine. At the same time, Russia doubts that the European Union will be able to survive without Russian fuel: with such a policy, Europeans will have to pay about 2,000 euros per thousand cubic meters of gas.

February 21. Bitcoin collapsed below $38 thousand

The value of the most popular cryptocurrency collapsed again on Monday, reaching $37,400. Bitcoin and other cryptocurrencies have been under pressure lately mainly due to the situation around Ukraine. 

However, the impetus for a sharp drop in the exchange rate today was the news of an attack on the OpenSea NFT exchange, as a result of which attackers stole hundreds of non-interchangeable tokens with a total value of more than $1.7 million. However, the OpenSea platform itself stated that it was not hacked, and users were attacked by scammers and gave them their tokens themselves. 

«As far as we can tell, this is a phishing attack. We don't think it's related to the OpenSea website,» OpenSea Executive Director Devin Finzer said.

As a result of today's collapse in prices, the capitalization of the cryptocurrency market fell by about $70 billion per day. During the day, the value of bitcoin recovered somewhat – to the level of $39200.

Ethereum, the second largest cryptocurrency by capitalization in the world, dropped by about 3% to $2,666. Other popular digital currencies, such as BNB, XRP and Cardano, lost about 5% in price on average.

February 24. Brent exceeded $101 on the news about the military operation in Ukraine

On Thursday morning, the price of benchmark oil is steadily rising amid the escalation of the military situation in eastern Ukraine. 

In particular, April Brent futures rose today to $101.27 per barrel, updating the highs since September 2014. Futures for North American WTI crude oil rose to the level of $96.84 per barrel.

Today it became known that Russian President Vladimir Putin announced the decision to conduct a special military operation in connection with the situation in Donbass in order to protect the residents of the DPR and LPR. President of Ukraine Volodymyr Zelensky, in turn, announced the introduction of martial law throughout the country.

Experts note that the military conflict significantly increases the risks of interruptions in Russian oil supplies and the introduction of diverse sanctions. At the same time, the US authorities announced that they are considering the option of re-selling oil from the country's strategic reserves (SPR) if prices for these energy resources rise sharply «as a result of Russian aggression.»

At the end of 2021, the United States already resorted to selling oil from the SPR (about 70 million barrels). This was done in coordination with other major players in the market.

February 25. What is the risk of the Ukrainian crisis for investors?

Since the beginning of 2022, the main «headache» of investors has been the return of volatility to the market: the oil market is showing growth to multi-year highs, as well as gold, stocks and indices are rising and falling, and the crypto market has reached a minimum where bitcoin can no longer serve as a reliable «safe haven asset». 

At the same time, investors have been worried about another news in recent days – Russia's invasion of the territory of Ukraine, which led to a fall in the ruble exchange rate and the suspension of the Moscow Stock Exchange. Analysts are closely monitoring the development of events and advise only one thing so far – not to give in to panic. 

«Although Russia and Ukraine will dominate the news in the near future, they will not determine the medium– and long-term direction of the market,» says Tom Essey, founder of the newsletter The Sevens Report.

The United States and its allies have so far announced a modest first stage of sanctions, to which the market reacted rather restrainedly. However, in the event of an escalation of the conflict, consumers and companies may refrain from loans, which will undoubtedly hit the banks. 

In addition, the shares of the tourism sector and the leisure sector may suffer, since during global crises, customers are usually not interested in travel and entertainment.

Analysts believe that US Treasury bonds and Japanese government bonds may become the most resistant to the shock. Experts also suggest that the investment portfolio is likely to suffer due to a possible tightening of the policy of central banks and a slowdown in economic growth, and not because of the Ukrainian conflict itself.

March 1. Oil continues to rise in price

The price of oil continues to rise on Tuesday amid the continuation of military operations on the territory of Ukraine. Prices are increasing, even despite reports from the United States about the further release of oil from strategic reserves.

As it became known, the United States and other members of the International Energy Agency (IEA) may soon decide to release about 70 million barrels of oil from reserves. An emergency meeting of the organization will be held today.

However, analysts believe that any release of oil from reserves will only be a short-term solution, especially if the supply of raw materials from Russia decreases. Warren Patterson, who is responsible for commodity markets strategy at ING Groep NV, said that it is unlikely that today's market expects a significant change in Russian exports, which suggests the likelihood of an even greater price increase in the event of a deterioration in the situation in Ukraine. 

The current Brent quote is $100.17 per barrel. The price of WTI oil futures is hovering around $97.40 per barrel.

February 28.  China does not intend to stop trade cooperation with Russia

The Ministry of Foreign Affairs of China has announced its intention to continue mutually beneficial trade cooperation with Russia. 

The country has no plans to join the Western sanctions imposed in response to Russia's special operation in the Donbas. The United Kingdom, the European Union, the United States and Canada have imposed sanctions against Russia aimed at Russian banks, members of the State Duma who supported the recognition of the DPR and LPR, some businessmen, as well as personally against Vladimir Putin and Russian Foreign Minister Sergei Lavrov.

In addition, the European Union has closed its airspace to Russian aircraft and banned aircraft from landing, taking off or flying over the territory of the Union.
 
The EU has also decided to prohibit operations related to the management of reserves and assets of the Central Bank of Russia, including transactions with any legal entity, organization or body acting on behalf of or on behalf of the Central Bank.

China has stated that it opposes unilateral sanctions that are not based on international law. In addition, the PRC demanded that the United States not harm the legitimate rights and interests of China and other parties in resolving the Ukrainian issue.

March 3. Brent rose to $118 per barrel for the first time in nine years

The oil market continues to grow, updating all new highs. Today, Brent oil quotes have reached the level of $118.20 per barrel for the first time since February 2013. The cost of North American WTI oil rose to $114.35 per barrel. 

Oil is getting more expensive against the background of a shortage due to the refusal of customers to purchase Russian raw materials. Analytical companies report that almost 70% of Russian oil trade has been frozen to date. Buyers are boycotting Urals oil, despite the large discount to the market (about $19) and the fact that the sanctions did not directly affect the energy sector.

Further deterioration of the situation in Ukraine will lead to the fact that an increasing number of major players in the oil market will withdraw from oil and gas projects in Russia and look for alternative sources of supply. And this will contribute to the continued growth of oil prices. To date, the American company Exxonmobil, the British-Dutch Shell, the British BP and the Norwegian Equinor have left the Russian market. 

To reduce high prices, members of the International Energy Agency (IEA) have agreed to sell 60 million barrels of oil from national reserves. The US Department of Energy also decided to release 30 million barrels from the country's strategic reserve. 

At the same time, the OPEC+ countries at yesterday's meeting decided not to accelerate the pace of increasing oil production and decided to maintain the plan to increase production quotas in April by 400 thousand barrels per day. The organization noted that the current fundamental indicators of the market and its future prospects indicate a good balance, and the current volatility is only a consequence of current geopolitical events.

March 2. Buyers are boycotting Russian oil, despite a huge discount

According to analysts, large oil buyers are boycotting Russian Urals oil because of the situation in Ukraine, despite the fact that Russia offers a discount to the market of up to $20 per barrel. Experts note that about 70% of Russian oil exported is difficult to find buyers. 

And although American and European sanctions do not restrict energy exports from Russia, ordinary buyers prefer to look for alternative sources of supply. To date, only a few refiners and traders buy Russian oil, but a sharp increase in the cost of freight and the appearance of «military» premiums for risk insurance significantly complicate transactions.

Europe is mainly switching to oil from the Middle East. Until now, European countries were the largest export market for Russian oil (the region accounted for about 53% of supplies). Another 39% of exports go to Asia.

At the same time, it has already become known that Asian countries are also gradually abandoning Russian oil. In particular, the Times of India newspaper reported that the country's largest oil refining company ****** Oil Corp. it will no longer purchase Russian oil, as well as oil from Kazakhstan on FOB terms (the costs of cargo delivery to the port of shipment are taken into account), since these conditions do not take into account the increase in the cost of freight and risk insurance.

The pressure on the energy sector is also exerted by gas, the cost of which has soared by 57% in Europe today – to $ 2,227 per thousand cubic meters. German Economy Minister Robert Habeck said that the worst-case scenario of sanctions against Russia has not yet materialized, as the country continues to export gas. At the same time, he added that it is necessary to prepare for the worst-case scenario. It is worth noting that Russia provides about 40% of gas supplies to Europe.

March 9. Bitcoin jumped by 8% after the statement of the US Treasury

Bitcoin and other cryptocurrencies jumped sharply in price after details of the executive order of President Joe Biden appeared on the website of the US Treasury Department. The order calls for an integrated approach to digital assets, and notes that government agencies will coordinate their work in this area.

It is noteworthy that this statement was removed from the Ministry's websites a few hours after it was made public. However, this was enough to increase optimism in the cryptocurrency market. 

According to CoinDesk, the current price of bitcoin is $42,361.30. Other cryptocurrencies, including ether, also rose sharply. The cost of the ether is $2747.32.

Analysts note that while some countries, for example, China, seek to destroy the cryptocurrency trade, others, in particular, El Salvador, accept it as a legal means of payment. In the USA, there is no structure of a sufficiently high level for the development and regulation of cryptocurrencies.

«The leaked Treasury statement has been welcomed by the crypto market as it seems to focus on development of the industry, rather than on imposing unrealistic regulations,» said Yuya Hasegawa, market analyst at the Japanese cryptocurrency exchange Bitbank.

March 11. Gold is getting cheaper as international tensions decrease

At the end of the week, gold shows a decline of more than 1% amid the weakening of geopolitical international tensions.

The current price of the April precious metal futures on the New York Comex exchange is $1981 per ounce. May silver futures fell to $26,117 per ounce.

The world stock and commodity markets today react mainly to the statement of Russian President Vladimir Putin that there are certain positive developments in negotiations with Ukraine. He stated this at today's meeting with his Belarusian counterpart Alexander Lukashenko. 

Traditionally, gold is used by investors as a safe haven asset, and on such positive news, many market participants began to switch to riskier instruments. Analysts note that the advantage of gold at the current level of foreign policy risks is rapidly decreasing.

At the same time, experts suggest that the sanctions imposed against Russia in the near future may further affect supplies, which will push commodity assets to growth.

March 10. Inflation in the US has updated the maximum in 40 years

According to the US Department of Labor, annual inflation in the country accelerated to 7.9% in annual terms by the end of February and reached its highest since 1982. 

Last month, inflation increased by 7.5%. On a monthly basis, consumer prices rose by 0.8%.

The annual figure is still at the records of forty years ago, now it is the highest since January 1982. The value of January was a record since February 1982.

The indicators in annual and monthly terms coincided with analysts' forecasts.

It is worth noting that core inflation in the United States (excluding food and energy prices) for the year was 6.4%, and for February – 0.5%.

Food prices in the United States rose by 1% in February, energy prices rose by 6.7%. Over the year, food has risen in price by 7.9%, and energy – by 37.9%.

March 14. Oil started to decline at the beginning of a new trading week

On Monday, the price of oil continued the decline, which began last week: the current Brent quote is $107.34 per barrel. Although more recently the price rose to the level of $ 130 per barrel. WTI quotes dropped to $102.82 per barrel (the recent high is $125.80). In total, at the end of the week, Brent fell by 5%, WTI – by 6%.

Oil market participants continue to closely monitor the situation around Ukraine. The President of the country, Vladimir Zelensky, said that negotiations between representatives of the delegations of Russia and Ukraine continue every day in a video format. Zelensky noted that the main task of the delegations is to organize a future meeting of the presidents of the conflicting countries.

Another factor influencing the dynamics of oil prices is the unclear prospect of the return of Iranian oil to the world market. Last week, Russia demanded from the United States legally formalized guarantees that Western sanctions would not hinder full-fledged trade, economic and investment cooperation between Moscow and Tehran in the event of the restoration of the agreement on the Iranian nuclear program (JCPOA).

In response, the United States stated that it did not consider it possible to negotiate exceptions to sanctions against the Russian Federation concerning its trade with Iran in order to preserve the JCPOA.

March 15. China's digital yuan may challenge the dollar

China is currently making great strides in implementing its central bank's national digital currency. Experts note that in 5-10 years, the Chinese digital yuan may well challenge the dominance of the dollar as the preferred currency in international trade settlements.

According to many analysts, the desire of world countries for alternative payment systems is mainly due to their desire to reduce the current (almost 100%) dependence on the US dollar. It is quite possible that in the future this dependence on the dollar will decrease to 80-85%.

In the United States, they are also thinking about introducing a digital dollar, but the United States will need about 5 more years just to plan and test a potential digital currency. At the same time, China has been preparing for the use of the digital yuan since 2014. It is obvious that at the moment the Celestial Empire occupies a leading place among all countries of the world and has outstripped all available financial technologies by a decade.

However, experts doubt that Beijing will use its «newborn» currency to save Russia under sanctions, despite some support from China in the Ukrainian conflict. Ultimately, China intends to achieve widespread recognition of the digital yuan, and turning it into a means against sanctions in the current conditions will not help in achieving this goal.

March 16. Economist named three signs of the end of dollar dominance

Economist Henrik Müller said that the US dollar may lose its status as the world's main currency. Doubts about the happy future of the US dollar are caused by several factors at once. Let's consider the main ones. 

First, inflation can seriously damage international confidence in the dollar and shake investor confidence in the value of the US currency. Müller stressed that the current inflation in the United States is at the level of 8% (and this is not the limit), and the further development of the situation depends on the actions of the Federal Reserve System.

Anti-Russian sanctions may also have a negative impact on the dollar. To date, the most serious measure against Russia is the freezing of Moscow's foreign exchange reserves in other central banks. Up to this point, such a step had never been taken in this form before. And if fears spread that Washington may confiscate foreign currency assets of other countries at any moment, the dollar may come under extreme pressure.

And the situation in Ukraine itself does not bode well for the dollar in the long term. As events unfold, the balance of forces in the financial market is changing – along with the global financial institutions of the United States, new blocs from sovereign countries with fragmented markets appear and strengthen their influence.

March 17. Oil remains close to $100 per barrel

The oil market has experienced a real shock in recent weeks: prices rose at the moment to the level of $130 per barrel and fell to a local minimum near $97 per barrel. The current quote of Brent is $100.23, the cost of WTI oil is at $96.90.

Investors continue to monitor the situation around Ukraine, as well as news from China, where a new outbreak of Covid-19 has been recorded.

Moreover, of interest was the forecast of the International Energy Agency (IEA), according to which Russia may reduce oil production in April by 3 million b/d against the backdrop of sanctions and refusals of oil buyers from abroad. And this, in turn, could cause a global oil supply shock.

It is worth noting that among all the OPEC+ countries, only Saudi Arabia and the UAE have sufficient spare capacity that could compensate for the reduction in supplies from Russia. In this regard, some countries are proposing to increase OPEC oil production in order to contain price increases.

Libyan Prime Minister Abdul Hamid Dbeiba noted that market volatility is already very high, and the huge risk of further supply cuts could push volatility to new levels. Moreover, the market is very vulnerable to the deterioration of the situation around Ukraine.

March 18. India has increased the import of Russian oil by 4 times

Analysts note that Russian oil exports to India increased fourfold in March, which indicates a redistribution of global energy flows after the situation around Ukraine.

India, which is the third largest country in the world in terms of energy consumption, bought several batches of oil at once, as buyers from Europe refused Russia's resources due to sanctions. In particular, the Russian Federation exported 360 thousand barrels per day to India in March, which is almost 4 times more than last year. 

The United States reacted negatively to such actions: White House spokeswoman Jen Psaki said that India could be on the verge of a historical past if it buys Russian oil. At the same time, Psaki admitted that these purchases would not violate US sanctions.

Last week, Russian Deputy Prime Minister Alexander Novak, during a telephone conversation with Indian Oil Minister Hardeep Singh Puri, discussed further cooperation and joint areas of work in the fuel and energy sector. At the moment, Russian exports of oil and petroleum products to India have approached $1 billion, and representatives of the countries hope for an effective increase in this indicator.

The Indian authorities said they are developing a mechanism for buying and selling raw materials in rupees and rubles, which will significantly facilitate trade after Western restrictions on international currency transfers to and from Russia.

March 21. Brent crude oil rose to $115 per barrel

On Monday, oil prices accelerated their growth after a decline at the end of last week and reached the level of $115 per barrel. The cost of raw materials is rising against the background of the ongoing Russian-Ukrainian conflict, as well as increasing tensions in the Middle East.

Today, Russian Deputy Prime Minister Alexander Novak said that oil prices could jump to $300 per barrel if the West refuses Russian oil. As you know, the European Union is going to impose an embargo on oil from Russia in the near future. However, it is worth noting that today Russia is the largest supplier of oil to Europe, which consumes about 500 million tons of oil, of which about 150 million tons, or 30%, are accounted for by Russian products. The country also supplies another 80 million tons of petroleum products to the EU.

Novak noted that it is absolutely logical to expect that the rejection of Russian oil will lead to disastrous consequences for the world market. At the same time, it is impossible to replace the volume of Russian oil on the European market quickly, and it will probably take more than one year. In such a scenario, European consumers will suffer, first of all: gasoline, heating and electricity will significantly rise in price. 

News from the Middle East had an additional impact on the market today. There, the Yemeni Houthis attacked several facilities in Saudi Arabia, including the fuel depot of the state oil company Saudi Aramco.

The focus is also on the situation in China, where another jump in the incidence of Covid-19 was noted. Investors are trying to assess whether this news will affect the volume of oil demand.

March 22. Xiaomi net profit collapsed by 72% in the IV quarter

Chinese electronics manufacturer Xiaomi Corp sharply cut its fourth-quarter net profit due to massive write-offs, while the company's revenue, on the contrary, increased.

According to the company's press release, last quarter's net profit fell to 2.44 billion yuan ($383.9 million), compared with 8.8 billion yuan in the same period a year earlier. The drop was driven by 3.14 billion yuan of investment write-offs.

Meanwhile, the company's revenue increased by 21% year-on-year to 85.58 billion yuan. The increase in revenue was due to an increase in sales in physical terms and an increase in selling prices.

It is also noted that according to the results of all 2021, Xiaomi increased its revenue by 33.5% to 328.31 billion yuan. At the same time, net profit decreased by 5.1% and amounted to 19.28 billion yuan. Revenue from overseas operations last year rose 33.7% to 163.6 billion yuan, accounting for 49.8% of Xiaomi's total revenue.

For the entire past year, the company sold 190.3 million phones, which is 30% higher than in 2020. Overall, Xiaomi ranked third in the list of leading smartphone manufacturers in the world in 2021 with a market share of 14.1%.

March 23. Annual inflation in the UK has reached its highest since 1992

According to the report of the National Statistical Service of the United Kingdom, the consumer price index in February in the UK showed an increase of 6.2% compared with 5.5% in the previous month. This was the highest figure in the last 30 years. On a monthly basis, consumer prices rose by 0.8% after falling by 0.1% in January.

Analysts expected annual inflation to accelerate to 5.9%, and monthly consumer prices were expected to rise by 0.6%. 

At the same time, the CPIH index (inflation taking into account homeowners' expenses for housing maintenance) was 5.5% after 4.9% a month earlier. In February, prices for this index increased by 0.7%.

Analysts believe that the growth of the consumer price index in Britain may even be above 10%, given the continuing rise in gasoline prices in the country due to anti-Russian sanctions imposed as a result of the events in Ukraine. Last week, amid increasing geopolitical tensions in the world, the Bank of England raised its base interest rate to 0.75% from 0.5% for the second time since February. Then the regulator warned that inflation could reach 8% in April.

March 24. Serbia called the transfer of payments for gas in rubles a serious problem

Yesterday, Russian President Vladimir Putin announced the transition to settlement in rubles when paying for Russian gas exports to unfriendly countries. He also instructed the Central Bank and the government to determine in a week the procedure for the purchase of rubles in the domestic market of the Russian Federation by buyers of Russian gas. In total, Russia currently exports gas worth about $10 billion a month.

Serbian President Aleksandar Vucic, in response to these actions, said that the transfer of gas payments to rubles would entail many problems. Vucic noted that some consider Putin's decision ingenious in the context of geopolitics and the organization of opposition to the dollar along with the yuan, but the Serbian president himself questioned its effectiveness and expediency.

Poland also does not agree with such a decision of the Russian authorities and does not see for itself the possibility of paying for gas in rubles. The head of the Polish gas company PGNiG, Pavel Majewski, said that the payment method has already been included in the contract with Russia for gas supplies, and Poland does not intend to change it. Germany also stated that the change of the settlement currency is the reason for the termination of the contract. 

Vucic also noted that there is Bulgaria, which has explicitly stated its unwillingness to conduct settlements in rubles. The Serbian President stressed that it is this country that organizes the transit of Russian gas to Serbia and Hungary.

March 25. The US. Main news: stock market, macro statistics

The stock market of the United States is showing a certain upswing: support is provided by the position of NATO not to physically interfere in the geopolitical crisis, as well as the manifestation of allied solidarity within the alliance.

Additional optimism was brought by statements by the President of the Federal Reserve Bank of Minneapolis, Neil Kashkari, that he expects 7 rate hikes by 25 basis points this year. At the same time, the representative of the Fed noted the likelihood of overdoing it on the issue of tightening monetary policy. 

Chicago Fed President Charles Evans expects a similar scenario with 3 more increases in 2023, but at the same time excludes the possibility of a 50 bp rate hike.

American macrostatistics turned out to be contradictory. The number of initial applications for unemployment benefits decreased by 28 thousand last week (to 187 thousand), which is the lowest value since 1969. Orders for durable goods decreased by 2.2% in February, and excluding defense orders – by 2.7%. 

Business activity, on the contrary, shows growth already in March. According to preliminary estimates, the index of business activity in the service sector in February increased from 56.5% to 58.9%, and the manufacturing PMI increased from 57.3% to 58.5%.

From corporate news, it is worth highlighting the growth of Uber shares by 4.96% after the announcement that the company has agreed to subscribe all taxi drivers in New York to its app. All sectors of the S&P 500 showed growth. The strongest were communications (+1.69%), information technology (+2.71%) and materials (+1.96%).

April 1. Does Nord Stream-2 have a future?

Against the background of acute geopolitical tensions in Europe, the future of the Nord Stream-2 gas pipeline is now in great doubt, say energy analysts.

The 1,234 km (2,468 km) offshore gas pipeline was designed to double gas supplies between Russia and Germany. However, in November last year, the German energy regulator suspended the certification process of the gas pipeline, and in February, with the beginning of the Russian military operation in Ukraine, it froze it altogether.

Analysts note that the large-scale geopolitical crisis has put an end to any joint projects and business partnership between Russia and the West. And Nord Stream-2, worth $11 billion, became one of the first victims of anti-Russian sanctions.

Moreover, the European Union has stated that by the end of 2022 it is going to reduce the import of Russian gas by two–thirds, and by 2030 it is going to completely end dependence on Russian imports of fossil fuels. At the same time, Russian President Vladimir Putin announced the termination of gas exports to «unfriendly» countries if gas payments are not made in rubles. The main EU countries responded to this demand with a refusal.

Many analysts and politicians doubt the likelihood of the resumption of the gas pipeline. It is obvious that the future fate of the Nord Stream-2 will depend on how the Ukrainian crisis ends, and who will ultimately dictate the conditions.

There are assumptions that the Nord Stream-2 will be able to be used for the transportation of hydrogen in the future, and Russia will be a potential supplier. However, this method of using the gas pipeline will depend on the decision of Germany itself – whether it will eventually want to revive energy relations with Russia using next-generation fuel under the flag of decarbonization.

March 31. Oil declined sharply after a significant increase

On Thursday, oil prices showed a sharp decline after the publication of the weekly report on oil reserves in the United States. In addition, traders are waiting for Washington to announce measures to support American consumers amid rising energy prices.

Brent oil quotes fell from the level of $112 per barrel to $105.12 in just a few hours. By Thursday morning, the price had recovered somewhat to $107.22 per barrel. The cost of North American WTI oil decreased from $108 to $100.55 per barrel. The current WTI quote is $102.56.

Today, the White House is to present a package of measures aimed at reducing energy prices on the American market. The Biden administration is considering releasing approximately 1 million barrels of oil per day from U.S. strategic reserves within a few months to combat rising gasoline prices and supply shortages.

At the same time, analysts note that the rise in prices and other problems caused by the Ukrainian crisis are of a medium- and long-term nature, while the release of oil from strategic reserves is only a short-term solution.

Another factor influencing the oil market was yesterday's report from the US Department of Energy, according to which commercial oil reserves in the country fell by 3.45 million barrels per week. Experts expected a less significant decrease – by 2 million barrels.

At the same time, gasoline reserves increased by 785,000 barrels and amounted to 238.83 million barrels, distillate reserves increased by 1.4 million barrels to 113.53 million barrels. Analysts predicted a decrease in gasoline stocks by 1.6 million barrels and a drop in distillate stocks by 1.5 million barrels.

April 4. Twitter shares up 26% after Elon Musk takes stake

According to information from the US Securities Commission website, businessman Elon Musk acquired a 9.2% stake in the social network Twitter. On the back of this news, the company's shares jumped 26%.

The CEO of SpaceX and Tesla now owns nearly 73.5 million Twitter shares. The value of the block of shares is $2.89 billion, based on the share price on the stock exchange on April 1 – $49.40 per share.

A little earlier, Elon Musk conducted a survey among Twitter users, according to the results of which about 70% of respondents (a total of 2 million users voted) are sure that this social network does not adhere to the principles of freedom of speech. At the same time, Musk wrote that he was thinking about creating his own platform.

Media reports that the fact that Musk became a shareholder of the platform will be another serious test for the new CEO of Twitter, Parag Agrawal. Agrawal succeeded company founder Jack Dorsey, who stepped down in November.

April 13. The UK is preparing for new inflationary jumps

Analysts of the Confederation of British Industry (CBI) say that the UK is waiting for new jumps in inflation, as well as rising costs for business and an increase in the cost of living.

Annual inflation in the country accelerated from February 6.2% to 7% by the end of March. This indicator has updated the record since 1992. At the same time, on a monthly basis in March, consumer prices rose by 1.1% after an increase of 0.8% in February.

Alpesh Palea, a leading economist at the CBI, noted that such a jump in inflation in March is not the last, and we should expect another price increase in April, when the increase in marginal energy prices will take effect. The volatility of global commodity prices and ongoing disruptions in supply chains continue to be additional factors of price growth. As a result, businesses will face higher costs, and households will face an increase in the cost of living.

Palea believes that the apparent dependence of inflation on the cost of energy carriers underscores the need to double investments in green energy. The economist believes that improving the energy efficiency of residential and commercial buildings will help reduce consumer demand and costs.

April 14. ECB keeps rates unchanged​​​​​​​

The European Central Bank expectedly kept the base interest rate on loans at zero, the deposit rate – at minus 0.5%. The rate on margin loans is left at 0.25%.

The regulator also announced a reduction in asset repurchase under the Asset Purchase Program (APP) to 30 billion euros in May from 40 billion euros in April. In June, asset repurchase will decrease to 20 billion euros.

At the same time, the ECB noted that the adjustment of asset repurchases within the APP in the third quarter will depend on statistical data. The Governing Council intends to keep rates at current levels until inflation in the euro area reaches 2% and is steadily fixed at this level.

The Board of Governors also intends to continue reinvesting proceeds from the repayment of securities purchased under the Pandemic Emergency Purchase Program (PEPP) at least until the end of 2024. It is worth noting that the repurchase of securities under PEPP was completed in March of this year.

After the ECB meeting, the euro/dollar exchange rate dropped from $1.0923 to $1.0758. The current quote of the EUR/USD pair is $1.0825.

Covid-19 outbreak in China damages growth prospects of country's economy​​​​​​​

China's economy is set to break growth records, but an unexpected outbreak of coronavirus, forced restrictive measures, and numerous problems abroad are limiting its surge.

In Q1 2022, the country's GDP showed fairly strong growth compared to the previous quarter. The GDP jumped by 4.8% on a yearly basis, according to the published data from the National Bureau of Statistics of China. According to Trading Economics, experts had forecasted China's economy to grow at a lower rate of 4.4%. Notably, in Q4 2021, China's GDP rose at an annualized rate of 4%. In the first three months from the beginning of this year, the Chinese economy grew by 1.3%.

China is trying to cope with the resulting domestic and external difficulties, compensating for the obvious dips in the economy in March with surprisingly strong growth of indicators in January and February. However, the effects of the COVID-19 outbreak on China's economy cannot be avoided. Severe restrictive measures, which the Chinese government imposed on its population in March, undermined the production of goods and markedly reduced consumer spending within the country. Only the sharp growth of the economy in the first two months of 2022 formed quite optimistic overall figures for the entire first quarter.

Consequently, retail sales fell by 3.5% in March, showing a much worse-than-forecast reading, while in January-February they were estimated at 6.7%.

The Chinese labor market traditionally experienced a revival in March, as factories usually try to attract as many employees as possible to their shops after the Lunar New Year holiday. This March, however, the sector suffered a severe shock. According to surveys, the national unemployment rate in March was 5.8%, which was last seen only at the beginning of 2020. Moreover, unemployment in more than thirty major cities reached a record 6.0%.

The industrial sector in China showed more positive figures in March than the labor market. Given the widespread shutdowns, production managed to increase by 5.0% year-on-year and even beat forecasts of 4.5%. However, we should admit that compared to the unprecedented rise in January-February, when production increased by 7.5%, the figures for March were rather lackluster.

The investment into the fixed capital in the first quarter is following a similar scenario: investment increased, but there was some damage in March to the elated growth of the first two months of the year. Thus, investment in fixed capital in the first quarter grew by 9.3% year-on-year, but this growth is not so positive, as in the first two months alone it was as much as 12.2%. Notably, fixed-asset investment is the key growth driver of the Chinese economy. These are the indicators that the Chinese government is counting on.

The real estate market in China is increasingly slipping into recession. Home sales by value fell by a full 26.2% year-over-year in March, and new construction declined by 17.5%. According to Reuters, the drop was the largest since early 2020.

The unexpected outbreak of coronavirus in China derailed the enthusiastic growth of the economy and sent it into a sluggish state of moderate recovery. The Russian-Ukrainian conflict and the sanctions imposed on Russia have also hit key sectors of the Chinese economy, as they have shaped unprecedented increases in the prices of energy, metals, and wheat, and further undermined global supply chains.

Many economists are already highly doubtful that Beijing can achieve its goal of a 5.5% GDP increase this year. The Wall Street Journal notes that demand for Chinese exports in the US and Europe has been severely weakened due to record inflation last seen decades ago.

Asian indices grow on hopes for support from government​​​​​​​

Asia-Pacific stock indices showed mixed trading during Tuesday's session. The Chinese Shanghai Composite and Shenzhen Composite indices increased by 0.12% and 0.06% respectively, while Hong Kong Hang Seng Index showed a rather significant decline of 1.88%. All other regional indicators rose. The Japanese Nikkei 225 index added 0.64%, the Korean KOSPI index gained 0.96%, and the Australian S&P/ASX 200 index increased by 0.52%.

The main reason for the growth of Asian indices was the message of the Central Bank of China about the creation and the soon involvement of a series of measures to state support of enterprises, which were most affected by restrictions related to the spread of coronavirus in the country.

There will also be an increase in lending in regions with a low rate of credit growth. It is suggested that more credit be given to firms engaged in transporting essential goods during the pandemic.

At the same time, there has been an increase in government regulation of companies involved in the technology sector.

The Chinese companies whose securities added in value are Link Real Estate Investment Trust gaining 1.55%, CNOOC, Ltd. increasing by 1.4%, and PetroChina Co. adding 1.2%.

The Nikkei 225 was boosted by the declining yen. This is more beneficial for exporting companies as it increases their potential income.

In February 2022, there was an increase in Japan's industrial production by 2%. In January, this indicator showed a decline of 2.4%. At the same time, the indicator exceeded the forecasts of experts, who assumed that the growth would be only 0.1%.

Meanwhile, investors remain concerned about rising energy and food costs. They lack confidence that central banks can combat inflation without undermining business activity in their states.

Among the companies on the Japanese index, Pacific Metals Co. added 8.4%, Sumitomo Osaka Cement Co. gained 5.2%, and Mazda Motor Corp. increased by 4.8%.

Other Japanese companies showed smaller increases. Toyota Motor Corp. added 1.3%, and Toshiba Corp. jumped by 1.5%. SoftBank Group Corp. dropped by 1.7%, and Fast Retailing Co. decreased by 1.5%.

Among the companies on the KOSPI index, Samsung Electronics Co. added 1.35%, and Hyundai Motor Co. increased by 1.1%. However, Kia Corp. grew only by 0.1%.

Among the components of the S&P/ASX 200 index, BHP Group, Ltd. jumped by 1.3%, and Rio Tinto, Ltd. increased by 1.5%.

Gold quotes fell to more than a week's low

St. Louis Federal Reserve President James Bullard sees no need for the Fed to raise interest rates by more than 50 basis points. However, the central bank has previously raised interest rates more strongly, and therefore Bullard does not rule out a potential increase of 75 basis points.

Meanwhile, Federal Reserve Bank of Chicago President Charles Evans said on Tuesday that federal funds rates could reach 2.5% by the end of the year.

June COMEX gold futures closed down $27.40, or 1.4%, at $1,959 an ounce, the lowest since April 11, while May silver futures fell 76 cents, or 2. 9%, to $25.391 an ounce.

As a result of Monday's session, gold reached the closing high for the most actively traded contracts since March 10. That day, trading ended at a 19-month high of $2,000.40, according to Dow Jones data.

Gold prices rose in six of the last seven sessions, despite rising Treasury yields and a stronger dollar. Rising bond yields increase the opportunity cost of owning gold, which does not generate coupon income. At the same time, the strengthening of the dollar makes commodities denominated in this currency more expensive for holders of other currencies.

The dollar continued to rise on Tuesday: the ICE dollar index, which tracks the dynamics of the US currency against a basket of six other currencies, reached a maximum since March 2020. The Japanese yen fell sharply against the dollar as the BOJ remains overly loose as the US Federal Reserve prepares to sharply raise interest rates and cut its asset balance in an attempt to contain rising inflation.

Meanwhile, gold is gaining support amid the Russian-Ukrainian conflict. Gold is considered a safe-haven asset during times of geopolitical uncertainty.

Technical analysis shows the potential for growth in gold prices, Otunuga notes, but quotes, apparently, are forming a new range. Support is located around $1960 and resistance is at $2000. In the event of a fall below $1960, prices could drop to $1920. In the event of a break above $2,000, the quotes may test the strength of the resistance levels located at the levels in 2009, 2015 and 2050 dollars.

Meanwhile, May copper futures ended the day down 1.8% at $4.718 a pound. July platinum futures fell 3.1% to $988.70 an ounce, while June palladium contracts fell nearly 2.7% to $2,380.40 an ounce.

Oil market news: while prices falling, return to the old days remains impossible​​​​​​​

Oil is declining sharply on Monday due to expectations of falling demand for energy resources in China. Thus, June futures on Brent crude on London's ICE Futures exchange is estimated at $101.37 per barrel today, down by 4.49% from the previous session's close. The price of WTI futures for June on NYMEX electronic trading is $97.42 per barrel, which is 4.42% lower than the result of the previous trading. According to last week's results, the price of benchmark Brent crude fell by 4.5% and WTI crude dropped by 4.1%.

China's largest city and financial center, Shanghai, reported a record number of new COVID-19 cases in the past two days - 39 deaths. The total number of deaths among those infected in this city with a population of 25 million people now stands at 87. The first deaths in Shanghai were reported on April 18. A lockdown was imposed in Shanghai on March 28, with most businesses shut down, markets and stores closed and residents locked in their homes and apartments. The population in Shanghai is daily tested for COVID-19 and those who test positive are sent to isolation centers.

Lockdown in Shanghai strongly affects global markets, as huge batches of Chinese components due to idling in factories and plants simply cannot reach production facilities in other countries.

The lockdowns fully affected the demand for gasoline, diesel, and jet fuel, which in China in April is likely to fall by 20% on a yearly basis. According to Bloomberg, the fuel price drop only for the current month has all chances to reach 1.2 million barrels per day. If this forecast comes true, the drop will be the most rapid since the beginning of the COVID-19 pandemic in the Chinese city of Wuhan more than two years ago.

In the light of Russia's rapidly developing military action in Ukraine, the situation in the oil markets is getting much worse. However, the disrupted global supply chain system, skyrocketing inflation, and acute shortages of energy resources were observed in the world even before the Russian special military operation, which has only worsened the prospects and made it impossible to find a quick way out of the current situation.

However, according to some experts, the conflict in Ukraine will end sooner or later, after which the global commodity market will return to its normal pre-crisis state. For example, analyst Michael Lynch reported in Forbes magazine that Russia's military operation will definitely end. The oil market will no longer have reason to worry, and it is sure to return to normal, and fuel prices will fall to quite acceptable levels. Analysts believe that the situation will be normalized by the lifting of sanctions against Russia. The return to the normal operation of the energy market is probably the main condition for Western European countries to maintain their economies and their usual standards of living.

However, the lifting of sanctions is a forced measure for the political elites of the European Union, but not for the United States. US Secretary of State Anthony Blinken, who has repeatedly stressed in his speeches that it did not matter to his country whether Russia ends its military operation or not, the sanctions against it would not be lifted by the United States anyway.

Oil Price reported that the long duration of today's stalemate increases the chance that there would be no return to the old pattern. For example, the fact that Europe is shifting from pipeline gas to liquefied natural gas and that Russian exports are shifting to Asian markets is irreversible. In this regard, the prognosis so far is disappointing for buyers: high oil prices promise to remain so for a long time.