On stock markets, the ongoing war in Ukraine remains the dominant theme, but investors repeatedly take advantage of periods of weakness to buy. Stock market sentiment was supported by slightly weakening oil prices. In view of the combination of war, high commodity and energy costs and rising interest rates, volatility is likely to increase again soon. Yesterday, stock indices in New York were able to gain and the Dow Jones Industrial closed +1% higher at 34'707.94 points. The S&P 500 went +1.43% higher at 4'520.16 points from trading and on the Nasdaq, indices yesterday even gained about +2.2%.
No support offered latest data from the American industrial sector. Thus, orders for durable goods in February fell more sharply than expected. Orders fell monthly by -2.2% – the sharpest decline since April 2020 – while analysts had forecast on average a minus of -0.6%.
US government bonds trended slightly weaker and the yield of ten-year Treasuries is currently quoted at around 2.37%. Meanwhile, in Asia, stock markets showed no consistent picture at the end of the week.
With excitement, the monthly business survey of the Munich-based economic research institute Ifo is expected today.
As a conclusion of the special summits of the EU, the G7 and NATO can probably be highlighted an emphasized unity and will to find a joint solution to the conflict with Russia. For its part, the EU decided on the occasion of its special summit to set up a solidarity fund for Ukraine. The funds are to be used for the rearmament and reconstruction of Ukraine. The EU has not yet been able to agree on a possible complete embargo of Russian energy supplies, mainly because of resistance from Germany.
The G7 announced that it would impose punitive tariffs on Russian goods to further isolate Moscow from the global economy and increase pressure on the Kremlin. Russia is also to lose most-favored-nation status under World Trade Organization (WTO) rules. In a joint statement, the G7 emphasized a broad coalition.
At the special NATO summit, Ukraine was promised further military assistance, including in the form of equipment to protect against biological, chemical, or nuclear attacks. NATO Secretary General Jens Stoltenberg stressed that “any use of chemical or biological weapons by Russia would entail serious consequences.” For his part, US President Joe Biden stressed that the 30 countries of the military alliance were “strong and united” in the face of Russia's war of aggression against Ukraine. The joint statement said NATO would significantly strengthen the deterrence and defense posture and further develop the full range of ready forces and capabilities.
As expected, the Swiss National Bank (SNB) left its key interest rate unchanged at a record low of minus 0.75%, citing the significant economic risks posed by the war in Ukraine and the impact on energy markets. In its baseline scenario, the SNB expects the global economy to continue to recover despite the geopolitical uncertainties. However, if the conflict escalates further and sanctions against Russia are tightened, this will significantly worsen the outlook. A worsening shortage of raw materials could also increase inflation in Switzerland and lead to second-round effects. In its current forecasts, the SNB assumes an annual inflation rate of +2.1% in the current year. At the end of 2021, only 1% was still assumed. Overall, however, the SNB still expects inflation to be temporarily high, and over next year inflation should then ease again to +0.9%. However, the SNB stressed that its new inflation forecast was subject to considerable risks.
The Norges Bank in Oslo has raised its key interest rate again by a quarter of a percentage point to +0.75% against the backdrop of accelerating price and wage inflation. It is also holding out the prospect of another rate hike by June. In September 2021, the Norwegian central bank became the first major Western central bank to raise interest rates since the outbreak of the corona pandemic. By the end of 2023, the central bank now forecasts a key interest rate of around +2.5%, compared with the previous rate path forecast of +1.75%.
According to the purchasing managers' surveys compiled by S&P Global (formerly IHS Markit), corporate sentiment in the eurozone countries deteriorated significantly in March against the backdrop of the war in Ukraine. The Purchasing Managers' Index for the private sector (PMI Composite) slipped from 55.5 to 54.5 points in March (consensus 53.8).
In the UK, the sentiment of the companies surveyed remained virtually unchanged in March, despite the geopolitical uncertainties. The corresponding purchasing managers' index weakened by only 0.2 points to 59.7 (consensus 57.5). According to S&P Global, the dismantling of the pandemic measures helped to offset the headwinds from the Ukraine war, Brexit and rising inflation.
|08:00||UK||Retail Sales (February, m/m)||+1.9%|
|09:00||ESP||GDP Q4 (q/q)||+2.0%|
|10:00||GE||Ifo Business Climate Index (March)||98.9|
|10:00||IT||Business Climate (March)||113.4|
|15:00||US||Consumer Confidence (March)||59.7|
|15:00||US||Pending Home Sales (February)||-5.7%|
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.