Russia could block gas supplies to Europe

On Tuesday, US President Joe Biden signed a decree banning the import of oil, petroleum products, LNG, and coal from Russia. The decree also bans US investment in Russia's energy sector and the financing of foreign companies investing in the sector. This could worsen the US Federal Reserve's inflation problem ahead of its policy decision next week. Russia warned earlier this week that oil prices could rise to $300 a barrel because it could cut off the main pipeline to Germany if the West blocked its oil exports. At the close of the stock market yesterday, the Dow Jones index (US30) decreased by 0.56%, the S&P 500 index (US500) lost 0.72%, and the NASDAQ technology index (US100) fell by 0.28%.

American brands McDonald's, Starbucks, PepsiCo, and Coca-Cola, announced the termination of business in Russia. Russia is turning into North Korea as the number of sanctions against Russia exceeds the number of sanctions against Iran.

European indices were mostly down yesterday.The German DAX (DE30) decreased by 0.02% on Tuesday, the French CAC 40 (FR40) lost 0.32%, but the British FTSE 100 (UK100) added 0.07%. Following the US, the UK also announced a phase-out of Russian oil and oil imports by the end of 2022. Europe faces serious problems due to stagflation (a slowdown in economic growth with high inflation). At the same time, the ECB does not plan to tighten monetary policy, leading to even greater inflation rates. Analysts see a very negative scenario for Europe's economic outlook.

The oil shock continues and is cumulative rather than one-time, so analysts predict that oil prices will soon reach $150 per barrel.

Prices of precious metals continue to remain high due to high inflation risks. But it should be noted that the growth of gold and silver is due only to geopolitical factors and war since with the tightening of Federal Reserve monetary policy, prices for precious metals tend to fall.

The Asian market is falling due to US intentions to ban Russian oil imports. Japan's Nikkei 225 (JP225) decreased by 0.30% from the opening, Hong Kong's Hang Seng (HK50) lost 0.51%, but Australia's S&P/ASX 200 (AU200) added 1.04%. China's consumer price index was unchanged at 0.9%, while producer inflation slowed by 0.3% to 8.8% in annual terms. Japan's GDP for the quarter increased by 1.1%, with 1.3% growth expected.

Main market quotes:

S&P 500 (F) (US500) 4,170.70 -30.39 (-0.72%)

Dow Jones (US30) 32,632.64 -184.74 (-0.56%)

DAX (DE40) 12,831.51 -3.14 (-0.024%)

FTSE 100 (UK100) 6,964.11 +4.63 (+0.067%)

USD Index 99.06 -0.23 (-0.23%)

• – Australia RBA Lowe’s Speech at 00:15 (GMT+2);
• – Japan GDP (q/q) at 01:50 (GMT+2);
• – China Consumer Price Index (m/m) at 03:30 (GMT+2);
• – China Producer Price Index (m/m) at 03:30 (GMT+2);
• – US JOLTS Job Openings (m/m) at 17:00 (GMT+2);
• – US Crude Oil Reserves (w/w) at 17:30 (GMT+2).

by JustMarkets, 2022.03.09

This article reflects a personal opinion and should not be interpreted as an investment advice, and/or offer, and/or a persistent request for carrying out financial transactions, and/or a guarantee, and/or a forecast of future events.