Closing summary
Time to wrap up, after another dramatic day in which Western countries moved to reduce energy ties with Russia and more multinationals cut links.
The United States and the UK have both announced bans in Russian imports, intensifying the economic pressure on Moscow as the war in Ukraine continues.
US president Joe Biden announced that a ban on US imports of Russian oil, gas and energy would deal another powerful blow to Putin’s war machine.”, declaring:
“Today I’m announcing the United States is targeting the main artery of Russia’s economy.”
Biden acknowledged that European partners were not able to move as fast, and said the US would work with them to cut their dependency on Russian energy.
The UK is acting to, but less swiftly, saying it would end Russian oil imports by the end of the year, and explore ways to end gas imports from Russia too.
Business secretary Kwasi Kwarteng said businesses should use the time to “ensure a smooth transition so that consumers will not be affected”.
The UK imports 8% of its oil from Russia. Kwarteng said he would be establishing a “taskforce for oil” to help companies find alternative suppliers. He pointed out that the UK is a significant producer of oil and alternative suppliers included “reliable partners such as the US, Netherlands and the Gulf”.
Kwarteng added that “while the UK is not dependent on Russian natural gas – 4% of our supply – I am exploring options to end this altogether”.
The US and UK moves pushed oil back towards Sunday night’s 14-year highs, with Brent crude oil surged as much as $10 per barrel, or 8% to hit $133/barrel.
MPs were told Britain could learn from Japan’s response to the Fukushima nuclear plant disaster by reducing energy consumption to deal with soaring global gas prices after the Russian invasion of Ukraine.
Suggesting a coordinated response to record gas prices could help ease the pressure on households, experts told MPs on the Commons business committee that steps to reduce national demand for gas-fired power next winter could be deployed.
The European Union also outlined plans to slash consumption of Russian natural gas by two thirds this year, and aim for a complete break with its single biggest energy supplier well before 2030 over the war in Ukraine.
Frans Timmermans, the European Commission vice-president in charge of the bloc’s energy transition, said the EU needed to become more independent in its energy choices:
Renewables are a cheap, clean, and potentially endless source of energy and instead of funding the fossil fuel industry elsewhere, they create jobs here. Putin’s war in Ukraine demonstrates the urgency of accelerating our clean energy transition.
Major companies have continued to cut ties with Russia, as its isolation deepens as the humanitarian crisis in Ukraine darkens.
Shell annnounced it will withdraw from the Russian oil and gas market, starting with halting purchase of Russian crude oil on the spot market.
Shell will shut its service stations, aviation fuels and lubricants operations in Russia, and start “a phased withdrawal” from Russian petroleum products, pipeline gas and LNG (liquified natural gas).
Shell also apologised for buying a consignment of Russian crude last week.
Consumer goods giant Unilever is to stop importing or exporting goods with Russia, and called for an end to Russia’s “brutal and senseless” war.
Fast food giant McDonalds has bowed to pressure, and will temporaily shut its 850 Russian restaurants.
There was also fresh turmoil in the metals market say the nickel price briefly doubled to $100,000 per tonne.
In an unprecented move, the London Metal Exchange suspending nickel trading, and then cancelled this morning’s trades. A ‘short squeeze’ has hurt traders who had bet against nickel, with Bloomberg reporting that Chinese nickel entrepeneur Xiang Guangda faces losses running into billions of dollars.
The surge in nickel will push up the cost of batteries for electric cars. And with other metal prices also at record levels, the cost of vehicles could rise.
Fertiliser prices are also soaring, which could drive up food prices or force farmers to cut production, with animal feed and CO2 also much pricier.
Economists have slashed their forecasts for the UK economy. The CEBR economic coonsultancy warning that the recovery will grind to a halt next year, as sanctions imposed on Russia lift commodity prices and push up inflation.
ING forecast that inflation will peak near 8% next month, when energy bills soar.
Resolution predicted the biggest squeeze on incomes in decades.
The bakery chain Greggs has warned prices are likely to increase due to a surge in the costs of ingredients, energy and fuel after Russia’s invasion of Ukraine.
Greggs, best known for its sausage rolls and pasties, predicted profits would fail to increase in the year ahead as it tried to offset cost inflation of up to 7%, up from 5% at the start of 2022, with the uncertain outlook.
European stock markets had a calmer day, with the UK’s FTSE 100 index closing slightly higher (up 5 points at 6964 points). Oil producers rallied, as did travel companies and banks.
Germany’s DAX ended the day flat, a day after sinking into a bear market (down 20% from its January peak).
And away from Russia, Lego reported a jump in profits due to strong sales during pandemic lockdowns.
Our main Ukraine liveblog is here:
Goodnight. GW
Updated
Larry Elliott: How the US Russian oil ban risks splitting the west’s response
Joe Biden’s ban on Russian oil imports has three risks, our economics editor Larry Elliott writes:
First, it could push up energy prices even higher, leading to more expensive gasoline at the pumps.
Second, it risks fracturing the western coalition against Putin, given European governments aren’t able to cut their own imports from Russia.
Thirdly, Putin could gets in his retaliation first by cutting off supplies, with Europe announcing plans to reduce its dependency on Russian oil and gas too.
Larry writes:
The EU has announced steps to reduce its dependency on Russian oil and gas, and the crisis could well have the effect of speeding up the transition from fossil fuels to clean energy, but in the short term the loss of such a big chunk of its energy supply would result in weaker growth and higher inflation.
While high energy prices eventually prove self-correcting because they tend to lead to recessions, the damage they can cause is considerable. UK living standards are on course for their biggest one-year fall since modern records began in the mid-1950s, with the war in Ukraine putting at risk the post-pandemic recovery. All of which makes it important that sanctions work quickly. The longer the economic war, the higher the cost.
Nils Pratley: Pulling plug on Russian oil and gas won’t be a smooth ride for consumers
The only straightforward part of Shell’s announcement of its intention “to withdraw from its involvement in all Russian hydrocarbons” was the grovelling apology for buying a shipload of Russian oil in the rapid-delivery “spot” market last week.
And an apology from chief executive Ben van Beurden was obviously necessary: the company’s huge Rotterdam refinery may have been running low on supplies, but the obligation was to pay through the nose to secure alternative barrels from west Africa or somewhere. Shell will now cease spot purchases from Russia immediately. Good.
The rest of the carefully worded statement, however, was a reminder that Europe’s effort to wean itself off Russian oil and gas is an exercise in how much disruption European governments and consumers are prepared to bear, and how soon.
Shell’s disentanglement plan came with two important qualifications. It will be conducted “in a phased manner” and will be “aligned with new government guidance”.
In other words, in the absence of formal EU sanctions, it’s up to European governments to tell Shell, and by implication, all oil majors how quickly to disentangle. The company’s timetable imagines “weeks” to remove Russian oil from the European system and “much longer” to withdraw petroleum products (meaning petrol, diesel, heating oil and so on) plus gas in both pipeline and liquefied form....
Here’s Nils’s full comment piece:
Updated
UK and US to ban Russian oil - expert reaction
Michelle Linderman, partner at law firm Crowell & Moring says the UK and US bans on Russian oil will push up fuel prices, even without European Union members joining in.
“The announcements today by both the US and UK that they will ban Russian oil imports by the end of 2022 is significant but neither the US nor UK is particularly reliant on Russian oil.
If the EU joins its allies then this would have a far greater impact on Russia. Russia’s economy is heavily dependent on the revenue generated from oil and gas exports and implementing restrictions on these sectors will inflict considerable pain on Russia.
There will, however, be a cost. Not only will this likely lead to higher fuel prices but there is a serious risk that these steps provoke President Putin further.”
Fawad Razaqzada, analyst at Think Markets says the US has launched “an all-out economic war against Russia”.
Biden has just announced that the US will ban imports of oil and gas from Russia. The UK has also announced it will phase out the import of Russian oil and oil products by the end of the year. There will be consequences: high gas prices, even more inflation and retaliation from Russia. Gold is teasing its record highs, stocks are reeling
Volatility isn’t going anywhere until Putin ends the invasion of Ukraine.
Danni Hewson, AJ Bell financial analyst, predicts inflation will rise even higher:
“It’s been trailed for days but many didn’t expect the US and the UK to follow through on their threats to ban Russian oil. The US has gone even further saying coal and gas imports are also off the table, “a powerful blow” to President Putin’s leadership said the US President and one which is already having global ramifications. The price of oil has been heading higher all day as markets waited for the news to come through when it did it just added to the volatility Wall Street had already been experiencing.
“There are big questions about how the world deals with both the current crisis and the longer-term shifts in supply and demand. Will it stimulate new exploration for those much prized and incredibly lucrative oil and gas supplies or will it speed up the transition to cleaner, greener fuel sources.
Whichever way the pendulum swings there is little doubt the consumer will suffer in the short term and inflation numbers which have been bandied around in the US and UK might be looking a little optimistic in the cold light of today’s announcement.
McDonald’s to temporarily close 850 stores in Russia after pressure
In another development tonight, McDonald’s is temporarily closing all of its 850 restaurants in Russia in response to the country’s invasion of Ukraine, bowing to pressure to suspend its operations.
The burger giant said it will continue paying its 62,000 employees in Russia “who have poured their heart and soul into our McDonald’s brand.”
But in an open letter to employees, McDonald’s President and CEO Chris Kempckinski said closing those stores for now is the right thing to do.
“Our values mean we cannot ignore the needless human suffering unfolding in Ukraine.”
Kempczinski said it’s impossible to know when the company will be able to reopen its stores, writing that:
The situation is extraordinarily challenging for a global brand like ours, and there are many considerations. For 66 years, we have operated with the belief that communities are made better when there’s a McDonald’s nearby.
Unlike other big fast food brands in Russia that are owned by franchisees __ including KFC, Pizza Hut, Starbucks and Burger King __ McDonald’s owns 84% of its Russian locations, Associated Press points out. More here.
In a message shared to employees and franchisees, CEO Chris Kempczinski shared that McDonald's will temporarily close all restaurants and pause all operations in Russia. Click to read the message in its entirety. https://t.co/g8BXaKxvNj pic.twitter.com/6jt0NnYhKz
— McDonald's Corporation (@McDonaldsCorp) March 8, 2022
DETROIT (AP) — McDonald's says it is temporarily closing 850 restaurants in Russia in response to the Ukraine invasion.
— Zeke Miller (@ZekeJMiller) March 8, 2022
McDonald’s move follows deepening pressure to pull out of Russia, with the #BoycottMcDonalds hashtag trending on Twitter in recent days.
These companies, @CocaCola & @McDonalds, should be ashamed to engage in commercial interactions in a state that has invaded its neighbor, with much death as a result. https://t.co/GLSADDX8ge #BoycottMcDonalds #BoycottCocaCola
— Nicholas A. Christakis (@NAChristakis) March 7, 2022
Updated
Unilever suspends Russian imports and exports
Consumer goods giant Unilever is stopping imports and exports of its products to and from Russia in the wake of the country’s attack on Ukraine.
Unilever, whose brands include Dove soap, Knorr soup, Hellmann’s mayonnaise, Ben & Jerry’s ice-cream and Marmite, said it would not invest any further in Russia and would also stop all media and advertising spend there.
Unilever also said it would continue to supply its everyday essential food and hygiene products made in Russia to people in the country, but would not take any profit from its Russian presence.
CEO Alan Jope said Unilever continues to condemn the war in Ukraine as a brutal and senseless act by the Russian state.
“Our business operations in Ukraine have stopped and we are now fully focused on ensuring the safety of our Ukrainian employees and their families, including helping with their evacuation where necessary, and providing additional financial support. We have also committed to donate €5m of essential Unilever products to the humanitarian relief effort.
“We have suspended all imports and exports of our products into and out of Russia, and we will stop all media and advertising spend. We will not invest any further capital into the country nor will we profit from our presence in Russia. We will continue to supply our everyday essential food and hygiene products made in Russia to people in the country. We will keep this under close review.
“We join calls for an end to this war and hope that peace, human rights, and the international rule of law will prevail.”
Shares in oil companies have rallied today, with BP closing 5% higher in London and Shell up 3%.
Susannah Streeter, senior investment and markets analyst at Hargreaves Lansdown, says:
‘’The biggest domino has fallen in the strategy aimed at further isolating Russia and weakening its economy. The US ban on Russian energy imports is the toughest economic sanction yet on Moscow given how reliant the country is on oil and gas revenues. The move has pushed a barrel of Brent crude up to over $132 a barrel, and prices are set to march higher given speculation is now rife that more governments, including the UK, will also begin imposing boycotts of Russian energy imports. With supply constrained, while demand rockets for supplies from elsewhere in the world, it seems the only way is up for energy prices.
Comments from the chief executive of Saudi Aramco that the Ukraine conflict is making the energy crisis even worse has done little to calm nerves. CEO Amin H. Nasser stressed that there is no capacity in the market right now that could replace 7 million barrels of oil which Russia currently supplies to the global market per day.
#Oil prices jump as Biden announces full ban on Russian oil, gas, energy imports in response to Putin’s invasion of #Ukraine. pic.twitter.com/7hP1m1bmfc
— Holger Zschaepitz (@Schuldensuehner) March 8, 2022
President Biden also said the “most significant package of economic sanctions in history” is causing significant damage to Russia’s economy.
It has caused Russia’s economy to “quite frankly crater”, with the rouble down 50% since Putin announced his war, Biden says.
One rouble is now worth less than “one American penny”, with Russia’s central bank no longer able to prop up the currency.
"It has caused the Russian economy to, quite frankly, crater...one ruble is now worth less than one American penny," President Biden says about sanctions on Russia. pic.twitter.com/3FN0In3TQy
— CBS News (@CBSNews) March 8, 2022
Biden: Working with Europe to reduce Russian energy dependence
President Biden adds that the decision to ban Russian oil imports has been taken in “close consultation” with our allies and partners around the world, particularly in Europe.
He says his overriding focus has been to maintain a united response to Putin’s aggression.
But he understands that many European allies and partners may not be in a position to join the ban.
Biden explains that the US produces far more oil domestically than all the European countries combined, saying said the US is a net exporter of energy.
BIDEN: We're moving forward with this ban understanding that many of our European allies and partners may not be in a position to join us.
— Eva McKend (@evamckend) March 8, 2022
The United States produces far more oil domestically than all of the European countries combined.
Biden says:
“We can take this step when others cannot, but we are working closely with Europe and our partners to develop a long term strategy to reduce their dependence on Russian energy as well.”
[Yesterday. German chancellor Olaf Scholz said imports of oil and gas from Russia were of “essential importance”, and the EU couldn’t find alternatives overnight].
Biden announces US ban on Russian oil imports
President Joe Biden has announces a US ban on Russian oil, gas and other energy imports.
Speaking at the White House, Biden says the United States is targeting “the main artery of Russian economy”.
Russian gas will no longer be acceptable at US ports, Biden explains, as the American people deal “another powerful blow to Putin’s war machine”.
Biden says the move has strong bipartisan support in Congress, and he believes in the country, declaring:
Americans have rallied to support the Ukrainian people, and made it clear we will not be part of subsidising Putin’s war.
Our US Politics Liveblog has more details:
UK to phase out Russian oil imports by end of the year
It’s official, the UK is to phase out the import of Russian oil and oil products by the end of 2022.
Kwasi Kwarteng, secretary of state for business, energy and industrial strategy, says the transition will give the market, businesses and supply chains “more than enough time to replace Russian imports”, which he says make up 8% of UK demand.
Kwarteng says businesses should use this year to ensure a smooth transition so that consumers will not be affected.
He says the market had already begun to “ostracise” Russian oil - even without sanctions - with nearly 70% of supplies unable to find a buyer.
Kwarteng also adds that he is “exploring options” to end Russian supplies of natural gas to the UK, whcih make up 4% of UK gas supplies.
NEW – the UK will phase out the import of Russian oil and oil products by the end of 2022.
— Kwasi Kwarteng (@KwasiKwarteng) March 8, 2022
This transition will give the market, businesses and supply chains more than enough time to replace Russian imports – which make up 8% of UK demand.
(1/4)
Businesses should use this year to ensure a smooth transition so that consumers will not be affected.
— Kwasi Kwarteng (@KwasiKwarteng) March 8, 2022
The government will also work with companies through a new Taskforce on Oil to support them to make use of this period in finding alternative supplies.
(2/4)
The UK is a significant producer of oil and oil products, plus we hold significant reserves.
— Kwasi Kwarteng (@KwasiKwarteng) March 8, 2022
Beyond Russia, the vast majority of our imports come from reliable partners such as the US, Netherlands and the Gulf.
We’ll work with them this year to secure further supplies.
(3/4)
The market has already begun to ostracise Russian oil, with nearly 70% of it currently unable to find a buyer.
— Kwasi Kwarteng (@KwasiKwarteng) March 8, 2022
Finally, while the UK is not dependent on Russian natural gas - 4% of our supply - I am exploring options to end this altogether.
(4/4)
Sanctions on Russia’s oil will keep crude prices elevated, predicts Pratibha Thaker, editorial and regional director for Middle East and Africa at the Economist Intelligence Unit:
“Driven by headlines, the international oil market continues to create havoc with oil prices. Russian imports make up a tiny amount of US’s energy needs, but Joe Biden’s bold unilateral ban on imports of Russian oil, LNG, and coal as part of the latest round of sanctions pushed oil prices to pass U$120/barrel.
Europe’s move in the same direction is likely to be slower, but the ripple effects from the invasion, oil sanctions against an extremely tight energy market points to elevated triple digit prices remaining for the moment.”
According to the US Energy Information Administration, Russia provided just 7% of total US petroleum imports (including crude oil) in 2020.
Brent crude has now jumped to $131 per barrel, a 6.5% gain today - up from $80 per barrel at the start of this year.
US crude is now up around $127/barrel, up over $7 today.
Updated
The UK’s Society of Motor Manufacturers and Traders has expressed some concern about the sharp rises in metal prices and the impact on carmakers.
Mike Hawes, SMMT chief executive, said:
“Russia and Ukraine produce some key raw materials for the European automotive supply chain, including aluminium, palladium and nickel, which is used in battery manufacturing. Rising metal costs add further risk into global supply chains already impacted by inflationary pressures, component shortages and energy price rises.
“UK vehicle makers are highly adaptable, but commodity prices are often set on international markets and volatility is expected for some time. The immediate future is unclear and we are working with government and our members to help understand what the long-term impacts of this situation may be and how to address them.”
Meanwhile, a spokesperson for the German car manufacturer Volkswagen said the company had hedging contracts in place on particular materials, which should give some protection against short-term surges in raw material prices.
“Clearly it is too early to say what the mid to long-term picture looks like. Having said that, as a global business, with around 10m car sales in a normal year, we clearly have significant buying clout and are an attractive partner for commodity companies.
“Volkswagen continues to hope for a cessation of hostilities and a return to diplomacy. It is our conviction that a lasting solution to the conflict is possible only on the basis of international law.”
Gold is rallying today too, with investors seeking out safe-haven assets as the Russia-Ukraine war continues to shake markets.
Spot gold is up almost 3% today at $2,054 per ounce, approaching the record high in August 2020.
Craig Erlam of brokerage OANDA says:
Record highs are not that far away and it’s hard to imagine a scenario in which demand doesn’t remain strong. We’re seeing such significant amounts of volatility and uncertainty at the moment that there’s rarely been a stronger bull case for a traditional safe haven like gold.
Politico: UK 'set to announce ban on Russian oil imports over coming months'
Politico are reporting that the UK is planning to announce a ban on the import of Russian oil over the coming months.
The move, expected to be announced this afternoon, will be gradually phased in over months, they say, rather than an overnight sharp shock, to avoid drivers panic-buying fuel.
They say:
There will be a months-long lead-in time on the ban to allow the global market to adjust and to stop people panic-buying petrol, the British officials said.
There will not be a ban on Russian gas at the same time, but this is still under discussion within the government, Politico adds.
SCOOP with @alexwickham for UK Trade Pros: UK to ban Russian oil
— Emilio Casalicchio (@e_casalicchio) March 8, 2022
Move will be phased in over months to let the markets adjust and prevent people rushing to petrol pumpshttps://t.co/UOYASGUtOC
Britain is less dependent on Russian imports of fossil fuels compared to much of mainland Europe and Germany remains resistant to a full ban by Western allies.
However, Russian supplies are not insignificant in the British market. They make up 8% of overall oil imports into the UK and account for 18% of diesel.
Here’s Sky’s Sam Coates:
So 4pm announcement that UK government will ban Russian oil by the end of 2022
— Sam Coates Sky (@SamCoatesSky) March 8, 2022
No announcement on gas today
That gives 9 months to adjust to buying stocks from US and Middle East.
Updated
Here’s the full story so far:
US crude has risen on expectations that the White House will announce a ban on Russian oil imports today.
WTI crude is currently up $7.50 per barrel, or 6%, to above $126 per barrel -- towards Sunday night’s 14-year high around $130/barrel.
Higher crude prices have already lifted gasoline prices at the pumps in recent months, helping to push US inflation to the highest since 1982.
But a Quinnipiac University poll found that despite having to pay on average more than $4 a gallon at the pump – more than $5 a gallon in California – 71% of Americans support a ban on Russian oil, our US Politics Liveblog reports.
Updated
The White House says president Joe Biden will make a statement at 10.45am in Washington (3.45pm UK time) on “actions to continue to hold Russia accountable for its unprovoked and unjustified war on Ukraine”.
Joe Biden is expected to announce an embargo on Russian oil and gas at 10.45 am pic.twitter.com/Qc7fWtZnHz
— Adrian Morrow (@AdrianMorrow) March 8, 2022
AP Source: Biden to ban Russian oil imports over Ukraine war
Associated Press says President Joe Biden has decided to ban Russian oil imports, toughening the toll on Russia’s economy in retaliation for its invasion of Ukraine, according to a person familiar with the matter.
Biden was set to announce the move as soon as Tuesday, the person said, speaking on the condition of anonymity to discuss the matter before an announcement.
The White House said Biden would speak Tuesday morning to announce “actions to continue to hold Russia accountable for its unprovoked and unjustified war on Ukraine.”
The U.S. will be acting alone, but in close consultation with European allies, who are more dependent on Russian energy supplies. Natural gas from Russia accounts for one-third of Europe’s consumption of the fossil fuel. The U.S. does not import Russian natural gas.
Ukrainian president Volodymyr Zelenskiy had called on US and Western officials to cut off Russian energy imports. They were not covered by the massive sanctions put in place on Russia over the invasion, meaning cash waas still flowing into Russia despite otherwise severe restrictions on its financial sector.
Oil jumps on report US to ban Russian oil imports
Just in - Bloomberg are reporting that the US is to ban imports of Russian oil, and that an announcement could come as soon as today.
The team at Bloomberg (@annmarie + co) reporting that President Biden is set to ban US imports of Russian oil as soon as today WITHOUT the participation of European allies. pic.twitter.com/17zAzenKCg
— Jonathan Ferro (@FerroTV) March 8, 2022
SCOOP: US to ban imports of Russian oil, sources tell @annmarie @SalehaMohsin and me. White House announcement as soon as TODAY.
— Jennifer Jacobs (@JenniferJJacobs) March 8, 2022
The news has driven the oil price higher, with Brent crude now up $5 or 4.5% today at $128.70 per barrel.
On Sunday, Secretary of State Antony Blinken says the US was in “very active discussions” with its European allies about banning Russian oil imports.
That drove Brent crude oil to 14-year high of $139 per barrel late on Sunday night, before dropping back after Germany pushed back against the idea yesterday.
Big headline from Bloomberg - US to ban imports of Russian oil as soon as today.
— Tom Wilson (@thomas_m_wilson) March 8, 2022
US only a small importer so shouldn't have much real-world impact on oil markets, but it sends another signal and one might assume - despite Europe's reluctance - that other countries will follow https://t.co/mn7HBglyXU
Updated
Nickel surge just raised the input cost for an electric vehicle by $1,000, Morgan Stanley estimates https://t.co/YdEUX9mq49
— CNBC International (@CNBCi) March 8, 2022
LME cancels nickel trades after 'unprecented' events
Wow. The London Metal Exchange (LME) has now cancelled all nickel trades that took place today, as the price doubled to a record $100,000 per tonne.
It has acted after prices doubled in a matter of hours in a remarkable short squeeze which reportedly leaves a Chinese nickel tycoon facing heavy losses potentially running into billions of dollars.
Having already suspended nickel trading this morning (see here), the LME has now decided to cancel today’s trades executed since 00:00 UK time before trading was suspended, and defer delivery of all physically settled Nickel Contracts due for delivery tomorrow.
In a notice to members, the LME says “The current events are unprecedented”, and that it is tracking the impact of the Russia-Ukraine situation on the metals market.
The exchange says:
The LME is committed to working with market participants to ensure the continued orderly functioning of the market. The suspension of the Nickel market has created a number of issues for market participants which need to be addressed.
This Notice is intended to address the most pressing of those issues. Further communications will be issued during the course of today, including regarding the process for reopening the market.
Nickel latest: In addition to the recent suspension of nickel trading (member notice 22/052) and given current circumstances, the LME has announced a number of further measures (see notice 22/053). Read LME latest news > https://t.co/x5x3OpqkVA
— London Metal Exchange (LME) (@LME_news) March 8, 2022
As flagged earlier, a major short squeeze has helped to drive nickel prices to unprecented levels, alongside concerns about supply disruption from Russia.
Bloomberg has been reporting in recent weeks that Chinese entrepreneur Xiang Guangda had amassed short positions in nickel derivatives to hedge against the risk of falling prices.
Guangda controls the world’s largest nickel producer, Tsingshan Holding, which has been ramping up a wave of new battery-grade nickel capacity in Indonesia.
Those short positions would have become increasingly costly, though, for Guangda, as the nickel price has risen sharply higher due to increased demand and supply worries.
Today, Bloomberg says Guangda, known as “Big Shot”, facing ‘billions of dollars’ in losses:
A Chinese tycoon who built a massive short position in nickel futures is facing billions of dollars in mark-to-market losses after the metal surged more than 170% in two days, according to people familiar with the matter.
Xiang Guangda -- who controls the world’s largest nickel producer, Tsingshan Holding Group Co., and is known as “Big Shot” in Chinese commodity circles -- has closed out part of his company’s short position and is considering whether to exit the wager altogether, the people said. Nickel rocketed to a record high above $100,000 a ton on Tuesday, driven in part by Tsingshan and its brokers’ activity, before trading was suspended.
While the exact scale of Xiang’s losses is unclear, Tsingshan’s short position on the LME is in the region of 100,000 tons of nickel, people familiar with the matter said. It could be even larger than that when positions taken through intermediaries are taken into account, people separately said. That means it would have suffered well over $2 billion of daily losses at the most extreme point of nickel’s surge on Monday.
Xiang Guangda, a Chinese tycoon who built a massive short position in nickel futures, is facing billions of dollars in mark-to-market losses after the metal surged more than 170% in two days, sources say https://t.co/ufqbtIlVBj
— Bloomberg (@business) March 8, 2022
LME cancels all nickel trades today, after suspending trading earlier after price jumped as much as 110% after hitting a record yesterday after a Chinese metals tycoon got caught in a monster squeeze of his short positions after nickel rallied after Russia attacked Ukraine. https://t.co/q38KGro8xy
— Martin Ritchie (@MartinShanghai) March 8, 2022
The LME’s contracts can be settled physically from metal that sits in its network of approved warehouses across the world, meaning it is the leading price setter for industrial metals and also the market of last resort for consumers who need raw materials.
Its customers include physical producers and big industrial consumers of metal seeking to hedge their exposure to prices (the FT has more details here).
Updated
ING cuts UK growth forecasts
Dutch investment bank ING has cut its UK growth forecasts too, warning there is a growing risk of a consumer spending downturn due to war in Ukraine and spiking energy costs.
ING now expects quarterly growth rates to fall to zero late this year, as the economy recovery peters out.
Inflation is expected to peak near 8% in April when the energy price cap lifts (up from 5.5% CPI in January), and still be near 6% at the end of the year.
ING’s developed markets economist James Smith explains:
“Like the eurozone, it’s perhaps too early to say that all of this will trigger an outright recession in the UK economy. Omicron appears to have done little, if any, lasting damage to the recovery, while investment looks set for a strong year. Wage growth is rising quickly by historical standards, while the stock of ‘excess’ savings built through the pandemic sits at 8% of GDP.
“However these are more heavily concentrated in higher-income groups that are less likely to cut back spending dramatically in the face of higher inflation, and the government will be under increasing pressure to add further support for those on lower incomes. Consumer confidence is sliding, and our best guess is that household spending falls later this year.
Updated
CEBR: UK economy to flatline in 2023 as inflation surges
The UK economic recovery will grind to a halt next year, as sanctions imposed on Russia lift commodity prices and push up inflation, the CEBR economics consultancy has warned.
CEBR has more than halved its forecast for UK growth this year, from 4.2% to 1.9%, and cut its 2023 forecast from 2.0% to 0%.
Over the course of both years this is a reduction in GDP of more than £90bn, CEBR says, as the cost of living rises, consumer consuption falls, and exports are hit by sanctions on Russia.
CEBR also warns that inflation will rise even higher this year, and not fall back as fast as hoped.
It now expects inflation to hit 8.7% in the second quarter of 2022 (up from 7.3% forecast before), and remain above 7% until Q1 2023 rather than falling back quite sharply.
That would sharply intensify the cost of living squeeze facing households, and mean heavy falls in disposable incomes this year and next.
The analysis is based on the oil price averaging $105 through the rest of 2022 and 2023, gas averaging 400p a therm, metal prices rising 30% for the rest of this year but falling back during 2023 to their pre-invasion levels, wheat 50% higher for the rest of this year and 25% higher next year, and some sympathetic price rises for other products.
CEBR says:
Worryingly, this is not a ‘worst case’ scenario – spot prices are now higher than we assumed and Russia’s threat to stop supplying oil could well push the price of oil well above the level assumed.
CEBR also warns that:
- As a result of higher commodity prices, we estimate that disposable incomes will fall in 2022 by 4.8% with a further fall of 1.4% in 2023. The forecast fall in living standards this year is an estimated £71 billion – which amounts to £2,553 per household.
- The combined effects of sanctions and slower world trade growth reduce export growth in 2022 by 2.1 percentage points and by 0.5 percentage points in 2023.
This will put Chancellor Rishi Sunak under further pressure to put the economy on a “semi-wartime setting” on 23 March, when he presents the Spring Forecast Statement, CEBR adds.
Last month, Sunak announced a one-off repayable £200 discount and a £150 rebate on some council tax bills, to address the jump in gas bills due in April.
New estimates from @Cebr_uk of the impact of Ukraine crisis on UK GDP - that recovery was nice while it lasted... pic.twitter.com/yLL8T5XFKI
— Robert Colvile (@rcolvile) March 8, 2022
Oil has added to its earlier gains, with Brent crude now up 3% or $4 at $127 per barrel.
Here’s our new story on Shell’s decision to stop buying Russian oil and natural gas and shut down its service stations, aviation fuels and other operations in the country:
Pressure grows on McDonald’s and Coca-Cola to suspend Russia operations
McDonald’s, Coca-Cola, PepsiCo and other major western food and drink companies are under mounting pressure to pull out of Russia after its invasion of Ukraine, amid calls for consumer boycotts of the brands.
The companies have been criticised for their failure to speak out about the invasion, and for continuing to operate in Russia, while a host of other firms such as Netflix, Levi’s, Burberry and Ikea have halted business in the country.
#BoycottMcDonalds and #BoycottCocaCola have been trending on Twitter since the weekend. Other western food and drink chains including Starbucks, KFC and Burger King are also still operating in Russia.
Sean Penn, the American actor and film-maker, urged Americans on Twitter to boycott Coca-Cola, PepsiCo and McDonald’s until the companies suspend their operations in Russia. Core Response, the non-profit group he founded in 2010 in response to the Haiti earthquake, is on the ground in Poland helping Ukrainian refugees.
Until Coca-Cola, PepsiCo & McDonalds suspend business in Russia, American citizens have a very safe & simple way to stand with Ukraine. Any among us can suspend our purchases of their products & ask our friends to consider doing the same.
— Sean Penn (@SeanPenn) March 7, 2022
https://t.co/OGNPJRCjrQ
In the UK, Dragon’s Den investor Deborah Meaden has also urged consumers to boycott the fizzy drinks giant Coca-Cola.
Can you stop drinking Coca Cola please. They are refusing to withdraw from Russia. Let’s show them some people power.
— Deborah Meaden 🇺🇦 (@DeborahMeaden) March 4, 2022
Here’s the full story:
Shell to withdraw from Russian oil and gas
Oil giant Shell has announced it plans to withdraw from the Russian oil and gas market, following the Ukraine invasion.
As an immediate first step, Shell says it will stop all spot purchases of Russian crude oil, after being heavily criticised for buying an oil shipment from Russia last Friday.
Shell will shut its service stations, aviation fuels and lubricants operations in Russia. It will also begin “a phased withdrawal” from Russian petroleum products, pipeline gas and LNG (liquified natural gas).
The company said the change could take weeks to complete and will lead to reduced throughput at some of its refineries.
Shell chief executive officer, Ben van Beurden, says the company is “sorry” for buying the oil shipment from Russia last Friday. Ukraine’s foreign minister, Dmytro Kuleba, publicly criticised Shell, tweeting on Saturday “Doesn’t Russian oil smell [like] Ukrainian blood for you?”, and urging the public to press multinational companies to cut all business ties with Russia.
Ben van Beurden says today:
“We are acutely aware that our decision last week to purchase a cargo of Russian crude oil to be refined into products like petrol and diesel – despite being made with security of supplies at the forefront of our thinking – was not the right one and we are sorry. As we have already said, we will commit profits from the limited, remaining amounts of Russian oil we will process to a dedicated fund. We will work with aid partners and humanitarian agencies over the coming days and weeks to determine where the monies from this fund are best placed to alleviate the terrible consequences that this war is having on the people of Ukraine,”
“Our actions to date have been guided by continuous discussions with governments about the need to disentangle society from Russian energy flows, while maintaining energy supplies. Threats today to stop pipeline flows to Europe further illustrate the difficult choices and potential consequences we face as we try to do this.
Shell to stop buying Russian oil, start “phased” withdrawal of petroleum products & gas - says latter “complex” due to central dilemma for society - ie desire to apply pressure Russia over its actions in Ukraine vs Europe’s need access to sufficient & affordable energy pic.twitter.com/hJrATXkWJe
— Dharshini David (@DharshiniDavid) March 8, 2022
Van Beurden explains that “Unless directed by governments”, Shell will:
- Immediately stop buying Russian crude oil on the spot market and we will not renew term contracts.
- At the same time, in close consultation with governments, we are changing our crude oil supply chain to remove Russian volumes. We will do this as fast as possible, but the physical location and availability of alternatives mean this could take weeks to complete and will lead to reduced throughput at some of our refineries.
- We will shut our service stations, aviation fuels and lubricants operations in Russia. We will consider very carefully the safest way to do this, but the process will start immediately.
- We will start our phased withdrawal from Russian petroleum products, pipeline gas and LNG. This is a complex challenge. Changing this part of the energy system will require concerted action by governments, energy suppliers and customers, and a transition to other energy supplies will take much longer.
Shell says it will immediately stop all spot purchases of Russian crude oil 🇷🇺🙅♂️
— Stephen Stapczynski (@SStapczynski) March 8, 2022
Shell came under fire last week for purchasing a shipment of Russian crude at a record discount. After public backlash, the company said it would divert Russia profits to humanitarian fund pic.twitter.com/Eodr7nh4YT
A ban on Russian vessels introduced last week by the transport secretary, Grant Shapps, does not cover cargo, allowing several ships to dock since then despite carrying gas or oil that was ultimately purchased from Kremlin-controlled entities.
But a ship carrying Russian oil that was moored at Stanlow Oil Refinery in north-west England had to move on after workers made it clear they would not unload the cargo.
Updated
LME suspends nickel trading after prices soar past $100,000
The London Metal Exchange (LME) has halted nickel trading for the day after prices doubled to a record $100,000 per tonne, fuelled by a race to cover short positions after Western sanctions threatened supply from major producer Russia, Reuters reports.
The rare move underscores the market panic created by Russia’s invasion of Ukraine with buyers scrambling for the metal crucial for making stainless steel and electric vehicle batteries.
“The LME has taken this decision on orderly market grounds,” said the LME, one of the world’s top commodity exchanges, adding it was considering a closure of several days.
“The LME will actively plan for the reopening of the nickel market, and will announce the mechanics of this to the market as soon as possible.”
The move came after three-month nickel on the LME more than doubled on Tuesday to $101,365 a tonne this morning (see opening post) before the LME halted trade on its electronic systems and in the open outcry ring.
The uncertainty caused by Russia’s invasion and resulting sanctions has added to an already bullish nickel market due to low inventories.
Nickel prices have quadrupled over the past week on fears of further curbs on supply.
Russia not only supplies about 10% of the world’s nickel but Russia’s Nornickel is the world’s biggest supplier of battery- grade nickel at 15%-20% of global supply, said JPMorgan analyst Dominic O’Kane.
Updated
European markets calmer
Europe’s stock markets are calmer this morning, after recent heavy falls.
In London, the FTSE 100 index is down just 12 points, or 0.2%, having hit seven-month lows at one point yesterday before partially recovering.
Travel stocks and banks, which have both tumbled since the Ukraine invasion, are rising. IAG, which owns British Airways, has jumped 4.2%, while jet engine maker and servicer Rolls-Royce are 4.6% higher.
Russian steel group Evraz are the top riser, up 28% today -- but still down 70% this year after its shares slumped as the Ukraine invasion began.
Germany’s DAX has risen back from Monday’s 16-month lows, up 0.7% today (but still around 20% since early January). France’s CAC is 1.1% higher.
UK household incomes "facing biggest decline since mid-70s"
UK household disposable incomes are on course to fall by the most since the mid-1970s after Russia’s invasion of Ukraine sent energy prices soaring to new highs.
The Resolution Foundation said the dramatic increase in global oil and gas prices was forecast to push UK inflation above 8% this spring, causing average incomes across Britain to fall by 4% in the coming financial year – a hit worth £1,000 per household, the biggest annual decline since 1975.
Warning the chancellor, Rishi Sunak, that urgent steps were required to help the poorest families in Britain with soaring living costs, the thinktank said weak wage growth and high inflation were expected to drive more children into poverty.
Inflation in the UK was already at 5.5% – the highest rate for 30 years – before Vladimir Putin ordered his troops into Ukraine. Now economists are warning that the conflict’s impact on global oil and gas prices will add to inflationary pressures around the world.
Here’s the full story:
These chars from Resolution show some of the economic fallout from the conflict:
Kicking off our Living Standards Outlook @LalithaTry notes that the UK's cost of living crisis predated the conflict. pic.twitter.com/WWE2EJ7BVu
— Resolution Foundation (@resfoundation) March 8, 2022
Most obviously, oil and gas prices have shot up.... pic.twitter.com/Lgot4URYa4
— Resolution Foundation (@resfoundation) March 8, 2022
This will drive inflation up to historic highs of over 8 per cent - possibly even hitting the 8.4 per cent peak from April 1991. pic.twitter.com/3IZx7cACV3
— Resolution Foundation (@resfoundation) March 8, 2022
High inflation means that real wages are shrinking - for the third time in little over a decade (they also fell post-financial crisis, and post EU referendum result). pic.twitter.com/waXBtPOmNd
— Resolution Foundation (@resfoundation) March 8, 2022
What does this all add up to for household disposable incomes? Our projection is for incomes to fall by 4% - or £1,000 a year - a fall not seen the 1970s, and only ever experienced during deep recessions. A further is forecast in 2023-24 (though this is far more uncertain) pic.twitter.com/MxpKp8bI2L
— Resolution Foundation (@resfoundation) March 8, 2022
Updated
Japan’s Nikkei share index has closed at a 16-month low, as investors worried that surging commodity prices would hurt corporate earnings and slow down economic growth.
The Nikkei shed 1.7%, or 430 points, to end at 24,790.95, the lowest since November 2020 (when vaccine trial success sparked a worldwide share rally).
The selloff followed losses in Europe and New York on Monday, where the Dow Jones Industrial Average fell nearly 800 points (-2.3%) as the Russia-Ukraine war impacts economies around the world.
Naeem Aslam, chief market analyst at Avatrade, explains:
The uncertainty and volatility in stock markets are being pumped by headlines about the Russia-Ukraine conflict, with investors fearing a rise in inflation owing to sanctions imposed on Russia and the American economy may face stagflation if the situation worsens.
Although crude oil prices took a step back, they are still near the 14-year high while European commodities such as wheat, gas, and nickel climbed higher.
The oil price has opened higher too, with Brent crude up 2% at $125.70 per barrel.
Yesterday, Brent spiked alarmingly to $139 per barrel, a 14-year high, after the US said it was talking to its European allies about potentially banning Russian oil imports. It then slipped back, as Germany’s Olaf Scholz pushed back against the idea.
Soaring energy costs will push prices even higher, slowing growth and creating the threat of stagflation, or recession.
RBC Capital Markets energy strategist Mike Tran writes that the market was in ‘disarray’:
“This is the tightest fundamental backdrop in years and the developments in Russia/Ukraine have ignited a market that was already a coiled spring. How high can oil prices go? Pick a number, this is a market in disarray.
Market fundamentals are the strongest in at least 15 years… it is not unfathomable for prices to rocket to $200/bbl by summer, spur a recession and end the year closer to $50/bbl ($200 call options have been bid). To be clear, this is not our base case, but such a scenario does not sound implausible today. Two weeks ago, such a notion would have been ludicrous.”
Energy prices volatile again this morning.
— Douglas Fraser✒️🎥🎙 (@BBCDouglasF) March 8, 2022
Brent crude oil was up from $123 per barrel to $128, now fallen back to a $125, up 1.4%.
Natural gas spot price +9% to 580p per therm.
Surge in fertiliser prices from Russia-Ukraine war adds to pressure on UK farmers
British food producers are facing surging prices for fertiliser, animal feed and CO2, which is used in packaging and the slaughter of livestock, as war in Ukraine disrupts exports from Russia and ramps up production costs.
Fertiliser prices are surging towards £1,000 a tonne, up from about £650 last week, linked to a surge in the price of gas – key to the production process – and panic-buying by farmers fearing the price will rise further in the coming weeks. The NFU said prices for nitrogen fertiliser were already up 200% year on year.
Farmers said they were likely to offset the price rises by buying less fertiliser than usual this season for cereal crops, potentially leading to lower production at a time when there is a threat to supplies from Ukraine, in peacetime responsible for 12% of the world’s wheat.
Gas prices rise as Russia threatens to cut supplies
UK wholesale gas price have risen this morning, after Russia threatened to cut gas supplies to Europe.
The day-ahead UK gas price has risen by nearly 10% to 565p per therm in early trading. That’s more than 10 times higher than a year ago, as the energy price crunch continued to hit the economy.
The contract for UK gas delivery next month is currently 2.5% higher, while the European front-month gas price is 4.3% higher.
Last night, Russian deputy prime minister Alexander Novak said Russia could cut gas supplies via the Nord Stream 1 pipeline to Germany, but it has not made such a decision yet.
In a statement on state TV, Novak cited the suspension of the Nord Stream 2 pipeline which runs under the Baltic Sea from Russia to Germany, bypassing Ukraine.
“In connection with unfounded accusations against Russia regarding the energy crisis in Europe and the imposition of a ban on Nord Stream 2, we have every right to take a matching decision and impose an embargo on gas pumping through the Nord Stream 1 gas pipeline.”
“But so far we are not taking such a decision.
The rise in the nickel price is the most extraordinary in the 145-year history of the London Metal Exchange, says the Financial Times.
It has led the LME to bring in emergency measures to allow traders to defer delivery obligations on all of its main contracts, including nickel.
The changes introduced by the LME include a limit on backwardation of near-term spreads — whereby spot contracts trade at a premium to futures contracts, indicating that the market is undersupplied — and allowances for holders of some short positions to avoid delivery of the metal.
But it was not clear how effective the changes would be. Commodities broker Marex said it was almost “inconceivable” that nickel had been squeezed to such an extent but with liquidity drying up, the “sky looks to be the limit” for prices.
First take, LME introduces emergency measures as nickel hits $100,000 a tonne https://t.co/7zTPtXwDQA via @financialtimes
— Neil Hume (@humenm) March 8, 2022
A unit of China Construction Bank Corp was given additional time by the LME to pay hundreds of millions of dollars of margin calls it missed on Monday, Bloomberg reports.
Prices have been rallying for weeks, as traders worry about the possibility of disruption to supplies from Russia, the largest exporter of refined nickel.
Monday’s squeeze was driven by market participants with short positions being forced to close them out because they couldn’t meet margin calls, brokers and traders said.
Alex Kuptsikevich, senior financial analyst at FxPro, says:
While the world discusses the prospect of an embargo on Russian oil and gas, the absolute madness is in metals. In many of them, Russia has a pretty significant share. Investors fear a ban on exports could be Russia’s response to sanctions, on a par with restricting supplies of agricultural products.
Palladium set a new all-time high at $3,439 on Monday, gaining 14.8% on the day at one point. Nickel reached $100,000/tonne, gaining more than 200% over the two days, but soon retreated to $82,000 (+71% since the start of the day).
Aluminum reached $4,000 per tonne on Monday, compared with stabilization at $2,600 from November to mid-December.
Copper exceeded $10,800/tonne yesterday, rewriting its historic high.
Commodity surge to drive up costs of electric vehicles
The surge in the price of commodity such as nickel will drive up the price of electric cars, just as motorists face record petrol and diesel prices at the pumps.
Nickel is a vital component in the production of lithium-ion batteries in electric cars -- which are the most expensive component in an EV.
Last year, Tesla’s Elon Musk tweeted that nickel was its biggest concern for scaling lithium-ion cell production, so shortages and higher prices could slow the transition to electric vehicles.
Russia’s invasion of Ukraine pushed aluminum - used in car bodywork - to record highs last week. Palladium, used in catalytic converters, has jumped 80% this year to record highs, which will also add to costs.
Metals aren’t being targetted by Western sanctions, but some shippers and autoparts suppliers are already steering clear of Russian goods, says Reuters.
That puts even more pressure on carmakers, who have already been hit by shortages of semiconductors since the pandemic began, and a surge in energy bills.
OUCH! #Nickel prices more than double, up 108% at $100,000 a ton amid a short squeeze as #Ukraine invasion escalates. The rapid surge will push up costs for EV manufacturers. pic.twitter.com/ifirKE2XQf
— Holger Zschaepitz (@Schuldensuehner) March 8, 2022
Updated
Introduction: Nickel surges as risk of shortages from Russia rises
Good morning, and welcome to our rolling coverage of the world economy, the financial markets, the eurozone and business.
Commodity prices are surging as fears grow that Russian supplies will be disrupted by the ongoing Ukraine war and sanctions imposed against Moscow.
Nickel, used in stainless steel and lithium-ion batteries, more than doubled this morning to a record high above $100,000 a ton on the London Metal Exchange, before easing back a little.
The astonishing surge in nickel came as banks cut their exposure to Russian commodities suppliers and major shippers avoid country’s key ports, sending metal prices dramatically higher. Russia is the third largest nickel producer, Reuters points out.
Nickel had ended last year at $20,757/tonne, but has pushed dramatically higher in recent days. This price surge is threatening to drive up prices for factories, adding to inflationary pressures on consumers, and also squeezing traders who had bet against it.
The market on the London Metal Exchange is in the grip of a massive squeeze in which holders of substantial short positions are being forced to cover at a time of low liquidity. To give a sense of nickel’s dizzying surge, it has risen around $11,000 a ton over the last five years. This week alone, it’s jumped by as much as $72,000.
“It’s going crazy -- it’s not reflecting any industry fundamentals,” said Jiang Hang, head of trading at Yonggang Resources Co. The “LME trading system is out of control and requires intervention,” or the contagion may spill over to other metals, he said.
Late Monday, the LME decided to allow traders to defer delivery obligations on all its main contracts -- including nickel -- in an unusual shift for a 145-year-old institution that touts itself as the “market of last resort” for metals. The LME also gave a unit of China Construction Bank Corp. extra time to pay hundreds of millions of dollars in margin calls that were due Monday, according to people familiar with the matter.
BOOM!!! Nickel prices surge above $100,000 a tonne on a huge metal short-squeeze. The London Metal Exchange has given a unit of China Construction Bank Corp. extra time to pay $$$$ in margin calls it missed Monday. Do follow @jfarchy for more and read this https://t.co/4lO5xbW3ph pic.twitter.com/BWaJodhiGC
— Javier Blas (@JavierBlas) March 8, 2022
Other metals such as tin, zinc and copper are also rattling higher, on concerns that supplies from Russia will be disrupted as the war in Ukraine.
Palladium, used by automakers in engine exhausts to reduce emissions, has also jumped to all-time highs as financial sanctions on Russia, which produces 25-30% of global supply, disrupt shipments and worsen a supply shortage.
“Commodity markets are increasingly pricing in a scenario under which a significant portion of Russian supply will be excluded from the market,” Morgan Stanley said in a note earlier this week.
“Prices are likely to remain highly volatile, until the real supply impact becomes clearer and prices can start to settle at a new equilibrium.”
Nickel soared past an unprecedented $100,000 a ton on the London Metal Exchange amid a huge short squeeze. A 5 year chart. pic.twitter.com/nT1OayU3QE
— Francine Lacqua (@flacqua) March 8, 2022
Stock markets are set for fresh losses today, as investors grow more concerned about the economic outlook.
Last night Wall Street suffered its biggest slide in more than a year, as the surge in the oiil price threatens to drive inflation even higher and slow the recovery. The selloff pulled the tech-focused Nasdaq index into a bear market, down 20% from its record high.
Risk aversion has intensified to start this week. Volatility (implied) has surged higher across a range of assets I monitor for sentiment while the $NDX and $DAX are in official 'bear' markets...and Japan's $NKY is on the verge. https://t.co/q4y2rkoz0E pic.twitter.com/ca2zoasuc9
— John Kicklighter (@JohnKicklighter) March 8, 2022
European markets are set to fall further, after Germany’s DAX also fell into a bear market last night.
German DAX index fell into a bear market. #DAX #Germany #investing pic.twitter.com/taTiN2q6qT
— Paul de Jong 🌐 (@pauldejong_) March 7, 2022
#Tuesday mkts more losses in Europe. #FTSE100 best performer as #nickelsqueeze continues. #Ruble record low #Russia default? #Macdonalds #CocaCola backlash on refusal to pullout of Russia. #Gold $2,006 #oil #wheat hold gains. #EarlyMorningCall 07:30amUK - https://t.co/stRkpyHz0b pic.twitter.com/ndQQttzpcL
— Jeremy Naylor (@JeremyNaylor_IG) March 8, 2022
Energy prices could remain volatile too, after the Kremlin threatened to cut off gas supplies to Europe and warned that the price of oil could rocket to $300 a barrel if the western allies step up their economic war against Russia by banning energy imports.
The agenda
- 11am GMT: BEIS committee session on how Russia’s invasion of Ukraine is impacting energy security in the UK and Europe
- 1.30pm GMT: US trade balance for January
- 3pm GMT: IBD/TIPP survey of US economic optimism
