On equity markets, investors gained courage on Friday and ensured a brilliant recovery from the losses of the previous days. Hopes of an imminent end to the fighting in Ukraine drove up the indices on Wall Street before the weekend. The Dow Jones Industrial closed +2.5% firmer at 34'058.75 points and the S&P 500 gained +2.24%, closing at 4'384.65 points. On the Nasdaq technology exchange, the indices rose on Friday by about +1.5%.
In Asia, the stock indices opened the new trading week with mixed feelings. In Tokyo, the Nikkei 225 index manages a slight gain of +0.2%, while in Hong Kong, the Hang Seng index is lower by -0.8%. Futures markets point to a negative opening on Europe's stock exchanges in the majority. US West Texas Intermediate crude oil futures trade around +6% higher at USD 97 per barrel in Asia.
The G7 – currently chaired by Germany – have decided to disconnect several Russian banks from the Swift banking communications network. Exclusion from Swift is considered a “magic bullet,” so to speak, as it is likely to lead to a virtual standstill in economic interaction between the West and Russia. For its part, the European Union announced that it would fully close the airspace over EU states to Russian aircraft. EU Commission President Ursula von der Leyen stressed that this also applied to private jets belonging to oligarchs. In response, Russia has also closed its own airspace to aircraft from several EU states. Furthermore, the EU wants to provide Ukraine with weapons and equipment for EUR 500 million.
Kremlin leader Vladimir Putin has put Russia's deterrent weapons, including nuclear weapons, on special alert in response to tougher sanctions imposed by the West. NATO Secretary General Jens Stoltenberg expressed concern and said Putin's threat was irresponsible. The United Nations also expressed extreme concern about Moscow's announcement that it would put the nuclear power's deterrent weapons on alert. A UN spokesman said, "The very idea of nuclear conflict is simply unimaginable." The United Nations General Assembly will address the war in Ukraine in an emergency session today (starting at 16:00 CET). It is expected to condemn Russia's aggression in the strongest possible terms and to reaffirm Ukraine's sovereignty and territorial integrity as well as its independence and unity.
The general economic sentiment in the euro countries unexpectedly improved significantly in February. However, the survey was conducted before the Russian attack on Ukraine. The EU Commission's Economic Sentiment Indicator climbed from 112.7 to 114.0 points (consensus 113.1). The optimistic economic sentiment was broad-based and mainly observed in the services sector thanks to the easing of pandemic measures. Due to the escalation of the conflict between Russia and the West, this brightening of sentiment is likely to be relativized again in the next survey.
The Munich-based economic research institute Ifo expects prices in Germany to rise again as a result of the war in Ukraine. According to Ifo, higher gas and oil prices will fuel inflation. "A five before the decimal point in the inflation rate in 2022 as a whole is just becoming more likely than a three," commented Timo Wollmershäuser, head of Ifo's economic forecasts. Around two-thirds of retailers and more than 85% of food retailers were planning price increases.
In the fourth quarter, the German economy was slowed by Omicron, but not quite as much as feared. Whereas an initial estimate had predicted a -0.7% drop in GDP in Q4, the Federal Statistical Office has now confirmed a decline of “only” -0.3%. Lower consumer spending (-1.8%) was the main negative factor. For 2021, Germany reported economic growth of +2.9%, partly offsetting the slump of -4.6% in the corona year 2020.
In the second-largest economy in the eurozone, the cost of living again increased significantly in February. A year-on-year inflation rate of +4.1% was reported, compared with +3.3% at the beginning of the year. The increase was thus significantly stronger than the +3.7% forecast by analysts. Compared with the previous month, consumer prices rose by +0.8% (consensus +0.5%). Inflation is being driven primarily by the sharp rise in energy prices.
The French economy continued its recovery in the fourth quarter of 2021. GDP increased by +0.7% compared with the previous quarter, confirming an initial estimate. In 2021, France's economy recovered from the drastic slump in 2020 (-8.0%) and reported a growth rate of +7.0%.
|08:30||SZ||KOF Economic Indicator (February)||107.8|
|09:00||SZ||GDP Q4 (q/q, revision)||+1.7%|
|09:00||ESP||Consumer Prices (January, y/y)||+6.2%|
|15:45||US||Chicago PMI (February)||65.2|
|UK||GlaxoSmithKline||Capital Markets Day|
|US||Zoom Video Communications||Q4|
Publisher: LGT Bank (Switzerland) Ltd., Glärnischstrasse 36, CH-8027 Zurich
Editor: Alessandro Fezzi, E-Mail: firstname.lastname@example.org
Source: LGT Bank (Switzerland) Ltd.
Risk Disclosure (Disclaimer)
This publication is an advertising material / marketing communication. This publication is for your information only and is not intended as an offer, solicitation of an offer, or public advertisement to buy or sell any investment or other specific product. Its content has been prepared by our staff and is based on sources of information we consider to be reliable. However, we cannot provide any confirmation or guarantee as to its being correct, complete and up to date. The circumstances and principles to which the information contained in this publication relates may change at any time. Information that has been published should therefore not be understood as implying that no change has taken place since its publication or that it is still up to date. The information in this publication does not constitute an aid for decision-making in relation to financial, legal, tax-related or other consulting matters, nor should any investment decisions or other decisions be made on the basis of this information alone. It is recommended that advice be obtained from a qualified expert. Investors should be aware that the value of investments can fall as well as rise. Positive performance in the past is therefore no guarantee of positive performance in the future. Investments in foreign currencies are also subject to fluctuations in exchange rates. We disclaim all liability for any loss or damage of any kind, whether direct, indirect or consequential, which may be incurred through the use of this publication. This publication is not intended for persons subject to legislation that prohibits its distribution or makes its distribution contingent upon an approval. Any person coming into possession of this publication shall therefore be obliged to find out about any restrictions that may apply and to comply with them. In line with internal guidelines, persons responsible for compiling this report are free to buy hold and sell the securities referred to in this report.