Risk aversion continues to simmer as markets assess the economic impact of the war in Ukraine



– Risk aversion sentiment has intensified as the war in Ukraine is poised to weigh on global economic growth and add to inflationary pressures.


– South Korea February CPI M/M: 0.6% vs. 0.5%e; Y/Y: 3.7% versus 3.5%e.

– Unemployment rate in January in Japan: 2.8% vs. 2.7%e.

– New Zealand’s Fin Min Robertson said he had seen inflation return to the RBNZ’s 1-3% range; Faster inflation would dampen consumer spending.


– Fierce fighting ignites a fire outside the Ukrainian nuclear power plant.

– Ukraine Foreign Min Kuleba said a fire broke out outside the Zaporizhzhia nuclear power plant. If the facility exploded, it would be 10 times worse than Chernobyl.

– Ukraine noted that the fires at the nuclear power plant have been extinguished.

– Russian forces reportedly occupied the Zaporizhzhia nuclear power plant.


– British Prime Minister Johnson is unlikely to launch Article 16 proceedings against the EU over the trade deal with Northern Ireland because of the war in Ukraine.


– Fed Chairman Powell said he noted that the Russian-Ukrainian war could accelerate moves in China to develop alternatives to current U.S. dollar-denominated international payments.

– The Fed’s Williams (FOMC voter) noted that the Fed has the ability to adjust interest rates higher if inflation ends up staying higher or more persistent.

– Bank of Canada (BOC) Governor Macklem said the economy could sustain higher rates as growth was robust; I can’t rule out a 50 basis point hike in the future.


US State Department spokesperson said there had been significant progress in Iran nuclear talks; We were close to a possible agreement. A number of difficult questions have not been resolved.

Speakers/Fixed Income/FX/Commodities/Erratum


clues [Stoxx600 -2.85% at 424.88, FTSE -3.01% at 7,021.07, DAX -3.58% at 13,208.50, CAC-40 -3.53% at 6,153.26, IBEX-35 -2.65% at 7,798.89, FTSE MIB -4.31% at 22,927.00, SMI -2.37% at 11,398.90, S&P 500 Futures -0.81%].

Market Focal Points/Key Themes: European indices opened lower across the board and fell further into the red as the session progressed; sentiment away from risk increased following reports of fighting around Europe’s largest nuclear power plant in Ukraine, with concerns about a potential escalation; the sectors that fell the least were utilities and real estate; the sectors among those leading the decline are industrial consumption; utilities sector supported as Brent trades lower than in previous session; focus on releasing US nonfarm payrolls later today; corporate events expected at the upcoming US session include Apple’s general meeting and Lufthansa Cargo’s annual press conference.


– Finance: Deutsche Bank [DBK.DE] -6% (freeze on Russian operations), ING Groep [INGA.NL] -6% (discloses impact from Russia), Hammerson [HMSO.UK] -1% (earnings).

– Manufacturers: Dassault Aviation [AM.FR] +1.5% (final result).


– Mr. Rehn (Finland) from the ECB said that he was carefully assessing the outlook for inflation over the medium term; would do what was necessary.

– General Sec of NATO Stoltenberg reiterates that NATO has not participated in the conflict in Ukraine.

– US Secretary of State Blinken told a special NATO meeting that if conflict came our way, we were ready for it.

– The British envoy noted that an Iranian nuclear deal was possible but not guaranteed.

– The Czech Central Bank (CNB) has confirmed that it is intervening in FX to support the currency CZK (Koruna).

– The Central Bank of Poland (NBP) would intervene in the foreign exchange market to support the currency PLN (Zloty).

– Europe’s largest nuclear power plant, Zaporizhzhia, in Ukraine, is now believed to be seized by Russian military forces.

– A Russian Defense Ministry official said the Zaporizhzhia nuclear power plant in Ukraine was operating normally.

– IAEA chief Grossi said a projectile hit a building at the Zaporizhzhia nuclear power plant in Ukraine, but the structure was not part of the reactor. The two Ukrainian nuclear installations (Zaporizhzhia and Chernobyl) were under the effective control of the Russian army.

– The Governor of the Central Bank of India (RBI) said central banks must make continuous efforts to shape and anchor market expectations. Too much communication can disrupt markets.

– The BOJ said it sees no need to consider normalization. Government’s repeated view that cost inflation is seen as unsustainable.

Currency/Fixed Income

– Risk release flows continued to help the USD, JPY and CHF against other pairs as the fighting in Ukraine continued. Overnight reports that Ukraine’s Zaporizhzhia nuclear power plant (Europe’s largest) was on fire sparked fresh fears in the market.

– EUR/USD at 21-month lows and approaching 4-year lows as the pair probed the 1.10 level. Traders continued to invoke the war in Ukraine and the prospect of sustained high commodity prices continued to weigh on expectations for European economic growth. Economic and political considerations seemed bound to keep the ECB on a wait-and-see policy in March. Dealers noted that the ECB was likely to shift to a more cautious stance at its policy meeting next week. The ECB seemed likely to link the trajectory of future asset purchases to the evolution of the Ukraine crisis. The market needs to focus on the possibility that the APP program is on track to end in September with a potential rate hike in December.

– Various Eastern European central banks have said they are defending their national currencies which have been hit by the economic fallout from the war in Ukraine. The Czech and Polish central banks were seen during the session.

Economic data

– (DE) Germany January current account balance: €B vs. €16.5B; Trade balance: 3.5 billion euros against 5.5 billion euros; M/M exports: -2.8% v +1.0%e; M/M imports: -4.2% v +2.0%e.

– (SE) Sweden Q4 Current account balance (SEK): 68.5 billion against 60.8 billion previously.

– (CN) Weekly copper stocks in Shanghai (SHFE): 168.0 K vs. 159.0 K tonnes previously.

– (FR) France Jan Production Industrielle H/M: 1.6% vs. 0.5%e; Y/Y: -1.5% vs. -3.2%e.

– (FR) France Jan H/M manufacturing output: 1.8% vs. 0.4%e; Y/Y: -1.1% vs. +0.2% before.

– (HU) Hungary Jan Industrial production M/M: 1.9% vs. 0.3%e; Y/Y: 7.1% versus 5.8%e.

– (BR) Brazil Feb FIPE CPI (Sao Paulo) M/M: %v 0.8%e.

– (RU) Narrow money supply of Russia with February 25 (RUB): 15.27 T against 14.50 T before.

– (TW) Taiwan’s foreign reserves in February: 550.0 billion dollars against 548.9 billion dollars previously.

– (HK) Hong Kong Jan Retail Sales Value Y/Y: 4.1% vs. 0.4%e; Retail sales volume Y/Y: +1.7% v -0.4%e.

– (DE) Construction PMI in Germany in February: 54.9 vs. 54.4 before.

– (United Kingdom) New car registrations in February Y/Y: 15.0% vs. 27.5% before.

– (IT) Italy Q4 final Q/Q GDP: 0.6% vs. 0.6%e; Y/Y: 6.2% versus 6.4%e.

– (UK) February construction PMI: 59.1 vs. 57.5e (13th month of expansion).

– (EU) Retail sales in January in the euro zone M/M: 0.2% against 1.5%e; Y/Y: 7.8% versus 9.2%e.

– (GR) Greece Q4 GDP Q/Q: 0.7% vs. 2.0% before; Y/Y: 7.7% vs. 11.4% before; GDP NSA (unadj) Y/Y: 7.4% against 11.8% before.

Issuance of fixed income securities

– (ZA) South Africa sold a total of ZAR 1.2 billion against ZAR 1.2 billion shown in I/L bonds 2025, 2033 and 2046.

Look forward

– (RU) Russia Light Duty Car Sales in February Y/Y: None is v% prior.

– 05:25 (EU) Daily ECB liquidity statistics.

– 06:00 (IE) Ireland Q4 GDP Q/Q: No est v 0.9% prior; Y/Y: no east v 11.4% before.

– 06:00 (IE) Ireland Q4 Current account balance: no est against 23.3 billion euros previously.

– 06:00 (IE) Ireland Feb Live Register Monthly Change: No is v -2.9K prior; Live recording level: none is v 164.0K before.

– 06:00 (UK) DMO to sell £2.0 billion in 1 month, 3 month and 6 month bills (respectively £0.5 billion, £0.5 billion and £1.0 billion pounds sterling).

– 06:30 (TR) Turkey Feb Real Effective Exchange Rate (REER): No est v 52.89 before.

– 06:30 (IN) India Weekly Forex Reserve w/e Feb 25: No east vs. $633.0 billion previously.

– 06:30 (IS) Iceland to sell 2042 RIKB bonds; Average return: %, bid-to-cover: x (no history).

– 06:45 (US) Libor daily fixing.

– 07:00 (IN) India announces next issue of bills (held on Wednesday).

– 07:00 (BR) Brazil Q4 GDP Q/Q: +0.1%ev -0.1% before; Y/Y: 1.1%ev 4.0% forward; Cumulative 4-quarter GDP: 4.5% vs. 3.9% before.

– 07:00 (MX) Mexico Gross Fixed Investment in December: 5.5% ev 5.9% before.

– 07:00 (MX) Vehicle production in Mexico in February: no est v 253.4 K before; Vehicle exports: No is v 216.6K before.

– 07:45 (US) Feb. CBIZ Small Business Employment Index: No east versus -0.95% before.

– 08:00 (UK) Daily Baltic Dry Bulk Index.

– 08:30 (United States) February change in the non-farm payroll: +423Ke against +467K before; Evolution of the private payroll: +400Ke v +444K before; Change in manufacturing payroll: +24Ke v +13K before.

– 08:30 (United States) Unemployment rate in February: 3.9% against 4.0% before; Underemployment rate: No is v 7.1% before; Labor force participation rate: 62.2% compared to 62.2% before.

– 08:30 (United States) February Average hourly gain M/M: 0.5%ev 0.7% before; Y/Y: 5.8%ev 5.7% before; Average weekly hours: 34.6ev 34.5 before.

– 08:30 (CA) Canada Jan Build Permit M/M: +1.2%ev -1.9% before.

– 08:30 (CA) Canada Q4 Labor Productivity Q/Q: -0.2%ev -1.5% before.

– 10:00 (CA) Canada Feb Ivey Purchasing Managers Index (Seasonally adj): No est v 50.7 prior; PMI (unadj): No is v 57.4 before.

– 11:00 am (EU) Potential sovereign ratings after European close.

– 1:00 p.m. (US) Baker Hughes Platform Weekly Count.


– 12:00 (CO) Colombia Feb CPI M/M: 1.3%ev 1.7% before; Y/Y: 7.6%ev 6.4% before.


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