Rouble down over 20% for week in Moscow as sanctions bite; drops 32% in offshore trade

from Forex News https://www.investing.com/news/economy/rouble-slips-back-towards-record-lows-in-volatile-moscow-trade-2777926
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Speculators pare bullish U.S. dollar bets to lowest since mid-Aug -CFTC, Reuters data

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War in Ukraine puts pressure on East European banks to prop up sinking currencies

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Moscow Exchange won't charge 12% commission on FX buying by importers

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Moscow Exchange bans short selling of euro instruments

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Key Economic Events and Reports for the Week Ahead

The mood that will likely prevail in the financial markets at the beginning of next week will certainly depend on the outcome of the Russian-Ukrainian negotiations, which are taking place this weekend. The markets have been waiting for de-escalation, but it is difficult for the parties to give in - Ukraine still hopes for Western help in the form of sanctions or the supply of weapons, while Russia needs to realize its plans to ensure its own security, as it claims. This determines the protracted nature of the conflict and the difficulty of finding a compromise in the negotiations.Next week it is also worth paying attention to the incoming economic data. On Wednesday it will be crude oil stocks from EIA. Problems with energy supplies from Russia amplify the risks of shortages, and if the data points to strong US demand, this will add instability to the market. On Thursday, the ECB will hold a meeting on monetary policy. No rate hike is expected, but the ECB's assessment of inflationary risks in light of high fuel prices is very important. On the same day, US inflation data for February will appear.On Friday, investors will pay attention to the British data on GDP and manufacturing volumes, as well as data on employment in Canada.

from Tickmill Expert Blog - Forex Traders Blog https://www.tickmill.com/blog/key-economic-events-and-reports-for-the-week-ahead-06-03-2022"
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The US Federal Reserve must fight its own battles

With inflation at its highest level in 30 years, the global economy struggling to recover from the pandemic, and now with a conflict in Ukraine threatening to send commodity prices spiralling upwards, you might think that the Federal Reserve, still the most important player in global finance, had enough on its plate already. 

Yet US president Joe Biden is busily appointing a series of woke warriors to its board to see that it is also tackling climate change, promoting inclusion, diversity and gender awareness, and sorting out reparations for slavery. By politicising the Fed, Biden risks destroying its credibility – and that matters for the whole of the global economy.  

The Fed goes woke

The Fed, like other independent central banks, was always meant to be beyond politics. Its role was to maintain the stability of the banking and financial system, and keep employment high and the economy expanding, so long as those objectives didn’t undermine the key priority of price stability. It was a narrow, technocratic remit. Indeed, staying out of politics is part of the reason for its success. It is precisely because individuals, companies and investors believe in the Fed’s neutrality that they have confidence in it. 

Biden and his advisers are now intent on undermining that. True, he reappointed Jay Powell, a Republican, as chairman to lead the bank. But the rest of his appointments are proving more controversial.

Sarah Bloom Raskin, for example, has been nominated to the key post of Fed banking regulator, making her one of the most powerful figures in global finance. And yet Raskin is best known for her radical views on central banking and climate change, arguing that financial institutions should distance themselves from any form of financing of fossil fuel and that, if they don’t move quickly enough, the Fed should punish them. “Raskin’s views would have devastating consequences” for the energy industry, a Republican senator said at her confirmation hearings.

Biden has also nominated Lisa Cook to the board of the Fed, an economist who has campaigned for slavery reparations, among other trendy causes. 

One needn’t disagree with the politics to see the problems. First, the issues are a distraction from the main task. Running a central bank is never an easy task, even at the best of times. The history books are littered with policy blunders that often had catastrophic consequences, from the Great Recession of the 1930s, to the inflation of the 1970s, to the financial crash of 2007 and its aftermath. 

Plotting the right path between monetary policy that is too tight and too loose is far from easy. Nor is keeping on top of a complex financial system, with liabilities that may crop up anywhere, a simple task, no matter how many experts are on the team. These are especially trying times right now. The Fed should focus its mind and leave dealing with climate change to others. 

Why neutrality matters

Second, the politics may well undermine the Fed’s credibility. A central bank often has to make unpopular decisions. It might have to raise interest rates sharply even if stockmarkets are tumbling, or unemployment is rising, or homes are being repossessed and companies are going bankrupt. It can probably manage that so long as everyone accepts that it is a neutral institution doing its best to manage the economy. If people start to see it as the agent of a particular brand of politics, then that is not going to work any more. The legitimacy of the Fed will start to ebb away, and once that starts to happen it is in big trouble. 

A central bank is meant to be a neutral custodian of the financial system and the economy, keeping inflation under control and supervising the banks. None is more important than the Federal Reserve. It is the custodian of what remains the world’s reserve currency and the anchor of a financial system that takes in most of the world. This is no time to undermine its credibility – and weaken the dollar as the lynchpin of global financial markets. 

from Moneyweek RSS Feed https://moneyweek.com/economy/us-economy/604519/the-us-federal-reserve-must-fight-its-own-battles
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Fears Of Supply Chains Wreckage Drive Commodity Prices up, Put Dent on European Currencies

Natural gas prices in Europe hubs renewed rally on Friday due to concerns about cold weather forecasts and continued uncertainty about Russian gas supplies to Europe in the light of military action in Ukraine.Meanwhile, the Ukrainian government's ban on the export of gas stored in the country, including gas normally held by Western European operators, has not affected transit flows of Russian gas, analysts at Engie EnergyScan said.Transit gas supplies at the Slovak-Ukrainian border crossing at Velké Kapušany stood at 882 gigawatt-hours a day on Friday, while Russian deliveries to Europe are estimated to be up 129 gigawatt-hours a day from the previous week as long-term contract holders solicit more gas after a spike in spot prices, according to Refinitiv analysis.Fears of more sanctions due to protracted military action in Ukraine that may affect global trade and supply chains put pressure on the currencies of European countries, such as EUR, GBP, SEK, NOK and DKK. However, being near levels of strong multi-month support they are poised to rebound should Russia-Ukraine negotiations which will be held on March 5 and March 6 pave the way for de-escalation.

from Tickmill Expert Blog - Forex Traders Blog https://www.tickmill.com/blog/fears-of-supply-chains-wreckage-drive-commodity-prices-up-put-dent-on-european-currencies"
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Eric Schmidt: seeing off the robot takeover

When the “father of the atomic bomb”, Robert Oppenheimer, witnessed the first nuclear weapons test in New Mexico in 1945, he famously quoted a line from Hindu scripture: “Now I am become Death, the destroyer of worlds.” In a recent book, The Age of AI and Our Human Future, Eric Schmidt makes a similar point about artificial intelligence, says the Financial Times. The threat is less obvious than with nuclear bombs, but AI has the potential to be equally destructive in unpredictable ways. There are far more “uncomfortable questions” than “comforting answers”.

The former Google boss, himself “a key AI power broker”, now hopes to fill the gap with a new $125m philanthropic project, AI2050, that will fund research into “hard problems” ranging from “deep fakes” – convincing faked video footage – to AI’s use in geopolitical conflict and its effect on economies. The broad remit is to advance AI technology “that everyone can generally agree is beneficial to society”. A tough ask.

Adult supervision at Google

Schmidt, 66, can certainly afford the loose change, says Wired. When he stepped down as chairman of Google parent Alphabet in 2017 he was “almost $14bn richer” than when he joined the start-up, co-founded by Larry Page and Sergey Brin. Schmidt was brought in as “a hired gun CEO” in 2001 – famously supplying the “adult supervision” that drove its transformation to global titan. 

It was a shotgun wedding, imposed by the outfit’s backers, Kleiner Perkins and Sequoia Capital. And although Schmidt was deemed a more acceptable candidate by the founders than others put forward, many doubted the “loveless marriage” would last. History said otherwise. That the Google “troika” lasted nearly 20 years in various forms was partly down to Schmidt’s character. Described as “calm and unflappable”, he had no particular need for the limelight and bowed to Page and Brin’s technical instincts. In a previous role as CEO of the networking giant Novell, notes Fast Company, Schmidt wrote the treatise on “managing geek gods”. 

Schmidt’s interest in tech began in 1970 when his father hired a computer and he precociously rewrote its software, going on to take a degree in electric engineering at Princeton. His first job out of school was at the Xerox research centre in Palo Alto – then the leading incubator of tech talent. From there, he joined Sun Microsystems and led the development of its ground-breaking Java programming language. Made CEO of Novell in 1997, he fought a losing battle to maintain the company’s market share against Microsoft NT.

A bevy of billionaires

Schmidt’s lofty international connections, his public backing of Hillary Clinton in the 2016 presidential race, and attendance at elite gatherings such as the World Economic Forum and the Bilderberg group, have long made him a target of far-right conspiracy theorists – not helped perhaps, says The Verge, by his reinvention, post Google, as “a technology adviser and investor in the US defence community”. 

In November 2020, eyebrows were raised when it emerged that Schmidt had applied to become a citizen of Cyprus via its controversial “passports-for-sale” programme, says Vox, potentially joining a bevy of “borderless” billionaires, mainly from the former Soviet Union and Middle East. More recently, he has spent $65m buying former Microsoft co-founder Paul Allen’s Enchanted Hill estate in Beverly Hills. 

Whatever the challenges ahead, Google’s former “elder statesman” looks to be keeping his options open.

from Moneyweek RSS Feed https://moneyweek.com/economy/people/604529/eric-schmidt-seeing-off-the-robot-takeover
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Sugar Futures (SBK2022), H4 Bearish Reversal!

Type: Bearish ReversalKey Levels:Resistance: 19.40Pivot: 18.99Support: 18.34Preferred Case:Prices are on bearish momentum. Prices might potentially move from pivot level of 18.99 in line with 100% Fibonacci projection and 50% Fibonacci retracement towards the 1st support level at 18.34 in line with 50% Fibonacci retracement and 78.6% Fibonacci projection. Our bearish bias is further supported by stochastic indicator as it is trading near resistance level.Alternative Scenario: Price can potentially goes up to the 1st resistance level of 19.40 in line with 127.2% Fibonacci retracement and 127.2% Fibonacci extension.Fundamentals:No major news

from Tickmill Expert Blog - Forex Traders Blog https://www.tickmill.com/blog/sugar-futures-sbk2022-h4-bearish-reversal"
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Investment Bank Outlook 04-03-2022

CitiIn focusGeopolitics – What happened overnight?Geopolitics was once again the main driver of moves overnight. Late into the NY session, we saw headlines that Ukraine and Russia had agreed on humanitarian corridors. The Asian session saw the most notable geopolitical developments with major risk-off move over a fire at a Ukrainian nuclear power plant. This risk-off move gave way after the power plant situation came under control. Details belowThe Asia session saw a pendulum swing in risk sentiment. A major risk-off move took place initially as Reuters reported that the Zaporizhzhia Nuclear Power Plant (ZNPP), the largest in Europe, was on fire, citing the local mayor, while AP reported Russia troops had been shelling the power plant. More details in CitiFX Wire’ Stephen Spratt note Treasuries surge after reports of Ukraine power plant on fire. A tweet by the Ukrainian Foreign Minister stated that should there be a disaster in ZNPP, it could be 10 times larger than Chernobyl.–Risk off price action hit bonds and equities more. 5y treasury yields led the losses at -15bps, with 10y at -12bps. S&P eminis were down 1.3% while Nasdaq100 futures were down 1.31%. Gold was up 0.36%–European assets were hit harder than Asian assets. Euro STOXX 50 futures were down 2.27%. Losses were also seen in Bund futures with implied yields down by about 8bps. In Asia, Kospi was down -1.44% and Nikkei down -2.45%.European OpenMarkets in Asia trading saw pendulum swings in risk sentiment following a relatively calmer NY session. Early Asian trading saw headlines that a fire had broken out in a Ukrainian nuclear power plant, the largest in Europe, while AP reported Russia troops had been shelling the power plant. Risk-off sentiment prevailed in markets. Later on, news broke that the situation was under control, with risk-off sentiment retreating, and markets retracing most of the moves. UST 10y yields moved as low as -15bps, before retracing to trade at -5bps.FX moves were more muted, with DXY popping slightly higher on the move. DXY now sits slightly in the green. PLN and HUF underperform at around -0.85%. USD funding stress returns with FRA/OIS surging wider again during Asia hours. Over in Asia, CPI prints for PHP and THB did not move markets, with the former printing lower than expectations, and the latter printing higher than expectations.Looking ahead, aside from geopolitics, market attention turns to NFP later today in the US at 13:30 GMT. EUR and HKD see retail sales prints and BRL sees a 4Q GDP print.

from Tickmill Expert Blog - Forex Traders Blog https://www.tickmill.com/blog/investment-bank-outlook-04-03-2022"
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Wine of the week: a trio of tremendous whites

2020 Tapanappa, Piccadilly Valley Chardonnay, Adelaide Hills, South Australia  

£36, reduced to £27 each for a case of six bottles, threshers.co.uk; £29.50, thechampagnecompany.com

I have a trio of tremendous whites from Tapanappa for you this week, all new vintage releases. In reverse order, starting with the grandest of the three: 2019 Tapanappa Tiers Vineyard Chardonnay (£32, in bond per bottle, Cellar Circle Exclusive, laywheeler.com; £40, thechampagnecompany.com). Only 2,700 bottles have been made and the UK received just 588, so get in quick. There is no doubt that this is one of the most extraordinary wines I have tasted from this legendary site. 

Next, 2020 Tapanappa Tiers Vineyard 1.5M Chardonnay (£35, thechampagnecompany.com) is made from a 2003 re-planting of Dijon clone chardonnay and it sits across the road from the original 1979 block. This is only the second time that this “close-planted” wine has made it to the UK, and I noted Chassagne-Montrachet-like presence here coupled with a very long finish. The oak is superb, and the depth of fruit, while prodigious, is not quite as lusty as that found in Tiers.

Finally, my featured wine. Only 525 dozen were made, and this is the most forward-drinking and invigorating chardonnay under this famous label. Well-balanced and not too exuberant nor expressive, the fruit is calm, layered, detailed and impressive. There are none of the exotic notes found in the other wines in this lithe beauty, making it a finely tuned and deliciously mesmerising creation.

Matthew Jukes is a winner of the International Wine & Spirit Competition’s Communicator of the Year (MatthewJukes.com)

from Moneyweek RSS Feed https://moneyweek.com/spending-it/wine/604517/wine-of-the-week-a-trio-of-tremendous-whites
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Daily Market Outlook, March 4, 2022

Daily Market Outlook, March 4, 2022 Overnight Headlines Ukraine Blames Russia For Attack On Europe’s Largest Nuclear Power Plant Ukrainian, Russian Negotiators Say Third Round Of Talks Will Be Held Shortly Ukraine Says Talks With Russia Agreed On Humanitarian Corridors Putin Says Russian Military Advance In Ukraine ‘Going To Plan’ China Likely To Set Lowest GDP Target Since 1990s At Key Meeting Japan’s Unemployment Edges Up Amid Record Covid Wave Australia Outshines Developed Global Peers On Profit Outlook Fed’s Williams: Situation Is Definitely Not One Of Stagflation UK Steps Back From Suspending Northern Ireland Trade Deal Euro Tumbles Further After News Of Fire At Ukrainian Nuclear Plant Bitcoin Falls Back Toward $40,000 On Report Of Nuclear Plant Hit Treasuries Advance As Ukraine Says Russia Shells Nuclear Plant Wall Street Is Already Pouncing On Russia’s Cheap Corporate Debt Oil Continues To Surge As Russian Troops Fire On Nuclear Plant Asia Stocks Fall As Fighting In Ukraine Reaches Nuclear PlantThe Day Ahead Reports that Russia has attacked Ukraine’s largest nuclear power station prompted another sharp ‘risk off’ move in markets overnight, although subsequent updates suggested that essential equipment was not impacted. Asian equity markets initially fell on the news, while US Treasury bonds rallied, and the US dollar firmed. Global energy prices remain elevated, with Brent crude oil holding close to an eight-year high above $111bbl. Meanwhile, wheat prices have surged to a 14-year high. The key data release of the day is the February US labour market report. It represents an important bellwether of broader economic conditions. January employment surprised significantly on the upside given concerns that the then prevailing high level of Covid cases was constraining economic growth. With the impact of Omicron fading rapidly, expect another strong rise in employment of 520k for February, while the unemployment rate could fall to a new post-pandemic low of 3.8%. Meanwhile, in an indication that the tightening labour market is boosting wages, look for annual earnings growth to accelerate to 5.9%, its highest since the early months of the pandemic. The UK construction PMI index rose to its highest level in six months in January as Covid restrictions were rolled back. This was primarily due to rising commercial activity. Continuing strong orders growth point to further output gains. However, less positively, house building slowed and the rebound in civil engineering was relatively sluggish. Given the scale of January’s rise, look for a modest pullback in the February headline index to 55 (from 56.3), although that would still be consistent with a brisk pace of growth. Already released data for some individual member countries, including a 1.5% gain for Germany, point to a rebound in monthly Eurozone retail sales in January following a big fall in December. Much of this improvement reflects the easing of concerns about Omicron and removal of restrictions. However, looking forward, the outlook for sales is clouded by the rapid rise in inflation that is eroding consumers’ real spending power. While the focus will continue to be on the Ukrainian crisis, today’s US labour market report will also attract attention as markets continue to debate the potential extent monetary tightening. Federal Reserve Chairman Powell repeated that he is likely to support an interest rate hike of 0.25% later this month and that further hikes are likely to follow. However, he also acknowledged that the outlook was particularly uncertain. The Fed now enters its communications blackout period ahead of the policy update on 16th March.G10 FX Options Expiries for 10AM New York Cut(Hedging effect can often draw spot toward strikes pre expiry if nearby (P) Puts (C) Calls ) USDJPY - 116.00 800m. 114.90/115.00 847m. 114.00 1.50bn (1.40bn P). EURUSD - 1.1300/10 1.20bn (858m C). 1.1250 497m. 1.1120 793m. 1.1100 1.04bn (717m P). AUDUSD - 0.7290/0.7300 1.04bn (635m C). 0.7240/50 470m. USDCAD - 1.3000 820m. 1.2800 924m. 1.2750 460m. 1.2700 1.74bn (930m C). 1.2590/1.2600 1.16bn (1.07bn P). EURGBP - 0.8520/30 745m. USDMXN - 20.70 1.51bn (1.05bn P). USDCNH - 6.35 425m. 6.30 451m.Technical & Trade ViewsEURUSD Bias: Bearish below 1.15 Bullish above EUR/USD under the gun again on reports of a fire at an Ukraine nuke facility Concerns over the Russia-Ukraine war already has the market risk off Fast approaching weekend and US NFP report tonight has many side-lined too EUR/USD from 1.1068 to 1.1010 in Asia so far, looking to test 1.1000 soon? Large option barriers tipped at 1.1000, break could see massive stops hit As to expirations today, only to upside - 1.1050 E594 mln, 1.1100 E1 bln EUR/USD drops to 1.10 EBS which is 78.6% 2020-2021 rise Target of the break is 2020 low at 1.0636 Current low shaped by option and corp hedging interest at 1.1000 Sparse option cover below 1.10000, risk market short gamma EUR/USD traders were building a big EUR/USD long position Trigger of 1.1000 barriers may result in faster paced decline as stops hitGBPUSD Bias: Bearish below 1.36 Bullish above. Softer in a choppy headline driven session Steady after a risk sell off on fears of Chernobyl type incident in Ukraine Now no signs of elevated radiation in Ukrainian nuclear plant Sterling fell 0.2% as risk appetite slid and now trades down just 0.05% Heavy volumes, cable 1.3317-55 range, EUR/GBP -0.15% in 0.8261-95 range Charts; momentum studies conflict, 5 10 & 21 day moving averages fall 21 day Bollinger bands slide - signals suggest the base is the weak side Targets 1.3161-66 longer term, Dec 2021 low and 38.2% 2020-2021 rise Close above 1.3457 50% of the February fall would end the downside biasUSDJPY Bias: Bullish above 114.50 Bearish below USD/JPY swoons with risk again off, Ukraine nuke fears Risk already off when news of fire at Ukraine nuclear facility hits wires Nikkei currently -2% @26,020, AXJ in red, E-Minis -0.75% @4326 USD/JPY in 115.25-56 range, some chop but moves both up and down limited Sat Gotobi Tokyo fix, pre-weekend/US NFP release position adjusts cited Support from area of 115.24 daily Ichi kijun, tenkan 115.10, 55-DMA 114.96 Spot in ascending hourly Ichi cloud between 115.19-44, 200-HMA 115.21 Option expiries - 114.00 $1.5 bln, 114.95-115.00 $845 mln, 116.00 800 mln US Treasuries bid on safe-haven flows, 10s currently yield @1.787% Most JPY crosses on back-foot, EUR/JPY especially, 127.79 to 126.94 EBSAUDUSD Bias: Bullish above .7100 Bearish below Resilient as headlines trigger a risk rout Trades up 0.1%, at the top of a busy headline driven 0.7301-0.7338 range Risk slumped on headlines Zaporizhzhia nuclear power station was on fire Largest nuclear station in Europe, but the fire was outside Stocks, yields fell and oil jumped, taking AUD lower, then came back Charts; 0.7324 200 DMA. 0.7330, 61.8% Oct-Jan fall tested and under pressure Close would be above a strong bullish sign for 0.7416, 76.4% of Oct-Jan fall 5, 10 & 21 DMAs head higher as 21 day Bolli bands expand - trending setup Close below the rising 0.7251 10 DMA needed to undermine topside bias

from Tickmill Expert Blog - Forex Traders Blog https://www.tickmill.com/blog/daily-market-outlook-march-4-2022"
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CADJPY, H4 | Potential For A Drop

Type: Bullish RiseKey Levels:Resistance: 91.707Pivot: 90.948Support: 90.113Preferred Case:With price moving above the Ichimoku cloud, we have a bullish bias that price will rise to our 1st resistance at 91.707 in line with the horizontal swing high resistance from our pivot of 90.948 in line with the 50% Fibonacci retracement and horizontal overlap support.Alternative Scenario:Alternatively, price may break pivot structure and head for 1st support at 90.113 in line with the horizontal swing low support and 200% Fibonacci projection.

from Tickmill Expert Blog - Forex Traders Blog https://www.tickmill.com/blog/cadjpy-h4-or-potential-for-a-drop"
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