Economic Consequences: Wednesday’s News

Economic Consequences: Wednesday’s News

The impact of sanctions against Russia and Ukrainian conflict has become more visible, especially if we talk about natural commodities.

Stocks continued to sell off on Wednesday as the war in Ukraine and sanctions against Russia caused a record surge in commodities, clouding the economic outlook and boosting demand for sovereign bonds.

Russia's invasion of Ukraine threatens the flow of crops, energy and metals. The two countries account for more than a quarter of the world's grain trade, and Russia is rich in oil and gas as well. Wheat hit a 14-year high, XBR was near $110 a barrel, and the commodity index jumped to a record high since 2009. Now the resistance is at $111.50, and support is at $108.30.

XBRUSDH1.png

Safe-haven demand supported the global fixed-income rally, with 10-year US Treasuries yielding about 1.72% and the Australian equivalent down 11 basis points. XAU fell in price, but remained near the 13-month high. USD was firm.

XAUUSDM15.png

EU ambassadors agreed to exclude seven Russian banks from the SWIFT financial messaging system. Still, they spared the country's largest lender Sberbank PJSC and a bank partly owned by Russian gas giant Gazprom PJSC.

What to watch next?

CAD overnight rate, 05:00 PM MT

USD Fed chair Powell Testifies, 05:00 PM MT

OPEC-JMMC Meetings, all day

 

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