. In response to the Ukraine-Russia conflict, the United States has sanctioned Russian transport companies in an effort to suppress Russia's oil sales revenue. These sanctions target actions by Putin to circumvent the imposed export oil price cap. Data from the Center for Research on Energy and Clean Air (CREA) shows that sanctions on Russian oil have reduced the Russian government's monthly revenue by an average of 12%. The sanctions have had a limited impact on recent fluctuations in crude oil prices.
2. The Baltic Dry Index, which measures changes in the cost of transporting various raw materials, has increased by 6.51%. Combined with crude oil prices, international shipping costs are likely to remain high.
3. Upcoming manufacturing PMI data, inflation, and economic performance indicators are crucial for understanding the condition of the goods production sector in various economies. Preliminary PMI data for February indicates continued growth in several economies, including the U.S. and the UK, while the recession in the Eurozone appears to be easing. In addition to manufacturing PMI, the Eurozone is set to release important updates, including February inflation data and GDP data for countries like France. The PMI price index, a leading indicator, suggests that CPI data in the coming months may show persistent price pressures. France, in particular, is one of the economies with the poorest performance in PMI data, and official data will be closely monitored.
4. After higher-than-expected CPI data, the U.S. is expected to see an increase in January's core PCE data, potentially refocusing attention on the possibility of persistent inflation and delaying rate cuts. Revised Q4 GDP, along with personal income and expenditure data, will help guide growth expectations in the U.S. Other notable data includes new home sales, housing prices, durable goods orders, and wholesale inventories.
5. Policymakers in China and Japan are facing challenges in improving their countries' bleak growth outlooks. Japan's inflation data is expected to be released on Tuesday, with expectations of a cooldown in January consumer prices, which could reduce the Bank of Japan's (BOJ) rationale for exiting negative interest rates this year. In China, authorities have made the largest-ever cut to the benchmark mortgage rate and increased regulatory pressure to revive the struggling stock market, eagerly supporting the fragile economic recovery. Friday's Purchasing Managers' Index (PMI) data will provide clearer indications of the effectiveness of Beijing's support measures.
6. The UK and US joint forces conducted the "most intensive airstrike" against the Houthi-controlled areas in Yemen from Saturday night to Sunday morning, resulting in at least four large explosions in the capital city of Sanaa and continuous warplane sounds overhead. Additionally, the Houthis launched several anti-ship missiles at the US oil tanker "TORM THOR" in the Gulf of Aden and deployed drones to attack several US warships in the Red Sea, indicating the international shipping cost could highly possible to remain high due to conflicts in the Red Sea and Arabian Sea.
7. With the end of the Chinese New Year, the stainless steel market has stabilized, showing signs of a potential price increase in the near term. The price of nickel on the London Metal Exchange (LME) has also continued to climb steadily, with market sentiment generally optimistic about the trend of price increases.
Comments