In this week’s recap, the most important news is the Russian invasion of Ukrainian territory, which affected global markets throughout the week. The high volatility caused the markets to collapse after the invasion and recover again at the end of the week. Russia’s main equities index, the MOEX, collapsed -by 45% and was temporarily suspended to stop the fall. Was the worst 1-day drop on record. Financial firms in Europe & the U.S. suffered heavy share price falls on Thursday, as they grappled with the impact of Russia’s invasion of Ukraine, digesting newly-imposed sanctions. Asian Pacific markets were largely higher on Friday, as investors recalculate the domestic Russian economy doesn’t matter much to the global economy & Russian oil keeps flowing.
Crude oil prices soared past $100 for the 1st time in over 7 years on Thursday, after Russian President Putin announced a military operation in Ukraine, confirming fears he would invade.
Russian missiles pounded Ukraine’s capital on Friday as their military forces pressed their advance & officials in Kyiv said they were preparing for an assault aimed at overthrowing the government. Air raid sirens continue to wail over Kyiv, a city of 3M people, as some residents sheltered in underground metro stations. Ukrainians to date are remaining defiant.
Commodity prices were volatile amid supply concerns over the Ukrainian crisis. The country, along with Russia, accounts for 1/3 of the world’s wheat exports, 20% of its corn trade & nearly 80% of sunflower oil production. Prolonged tensions could risk shipments from Black Sea ports, as well as production & transportation within the countries. Wheat prices have already risen by +20% in 2022, while corn costs up +15%. Prices skyrocketed Thursday, w/wheat futures at their highest levels in nearly 14 years. Russia is a key supplier of not just oil, but several strategic commodities, all of which should benefit in price from heightened geopolitical tensions in Eastern Europe. Russia globally is the number 1 producer of palladium & 2nd largest producer of platinum & the 3rd largest wheat producer. Russia remains a very strategic country when it comes to commodity production especially minerals, commodity exports & therefore the direction of the global economy.
As Russia began its invasion of Ukraine, the ruble fell to its lowest level ever versus the dollar, trading at 89.89, with USD up more than +10% against the Russian currency. Russia’s main equities index, the MOEX, collapsed as much as -45% after trading was temporarily suspended shortly after opening, its worst 1-day drop on record. It ended down -33.28% at 2,058.12, erasing more than $150B in value.
In response to Russian aggression, U.S. President Biden announced sanctions on Russian bank VEB & its military bank, Russia’s sovereign debt & a number of wealthy oligarchs & their families. The U.K. has also started targeted economic sanctions against 5 Russian banks & wealthy individuals. Germany took steps to halt certification of the Nord Stream 2 gas pipeline from Russia. Japan will ban the new issuance & distribution of Russian government bonds.
U.S. national debt has officially surpassed $30 trillion; increased use of non-renewable energy sources; U.K. consumer price index set to top +7% in April; Truth Social launches on Apple’s App Store this week; Singapore wants to introduce net wealth taxes; Nueva Pescanova plans to open the first commercial octopus farm; Opensea was hacked, 254 tokens stolen over the course of the attack.