What’s moving the market?
As President Vladimir Putin’s war in Ukraine enters its second month, western leaders are touting their unity and announcing new sanctions on hundreds of Russia’s elite. Punishing sanctions levelled by the West has sent Ruble crashing to record lows, shuttered Moscow’s stock market and made Russia assets toxic on the world stage. Survey shows that the Russia economy is headed for one of its deepest economic contractions with the gross domestic product is expected to shrink nearly 9.6% this year.
The Federal Reserve has approved its first interest rate increase in more than three years, an incremental salvo to address the spiralling inflation without torpedoing economic growth. Officials also hinted that there could be hikes at each of the remaining six meetings in 2022 especially after Russia’s war on Ukraine disrupted the global supply chain and fanned prices further.
Saudi Arabia and China have been growing closer for years, and the news comes at a time of frustration among Gulf states with the US. The Wall Street Journal has reported that Saudi Arabia and China are in ‘active talks’ to price some Saudi oil sales to China in Yuan instead of the US dollar. About 80% of global oil sales are done in dollars, and Saudi Arabia has conducted its deals exclusively in the greenback since 1974. So if a Saudi-yuan deal were to be made, it would bolster China’s currency at the expense of the dollar as Beijing looks to challenge US leadership in financial markets.
The summit was held to address Russia’s aggression against Ukraine. The members of the board condemn the invasion and called Russia’s aggression against Ukraine, “the gravest threat to Euro-Atlantic security in decades.”. Speaking after an extraordinary summit of the military alliance in Brussels, NATO secretary – General Jens Stoltenberg told reporters that the organisation has collectively agreed to reinforce its defence capabilities in the region.