Key international financial events this week also include: the war between Russia and Ukraine, the testimony of Federal Reserve Chairman Powell to Congress, the US non-farm payrolls report in February, and the ministerial meeting of the Organization of the Petroleum Exporting Countries and its partners (OPEC+), Electric vehicle companies such as Lordstown, Lucid Motors, and NIO will also report earnings.
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This week’s trading notes (0228-0304)
1. Powell Semiannual Monetary Policy Congressional Hearings
Powell will testify before the House Financial Services Committee on Wednesday night in Taiwan for the semi-annual report on monetary policy, before appearing before the Senate Banking Committee on Thursday night. This may be Powell’s last public speech on monetary policy before the March meeting, with markets watching to see if he will reveal any signals about the impact of the Russian-Ukrainian conflict on monetary policy.
According to its semi-annual report on monetary policy released on Friday, the Fed reiterated that it will “soon” enter a rate hike cycle, with inflation well above 2 percent and a strong labor market providing the right environment for a near-term rate hike. Ball will send the report to both the House and Senate.
The market is concerned about whether the outbreak of the Russian-Ukrainian war and high oil prices will make the Fed slow down the pace of interest rate hikes this year.Traders will also be looking for how the Fed shrank nearly 9 trillionDollarClues to the balance sheet, investors now expect the Fed to start reducing its holdings of U.S. Treasuries and mortgage-backed securities (MBS) in June or July.
2. The Russian-Ukrainian War
As Ukraine and Russia continue to fight, Western countries finally agreed on Saturday (26th) to impose the toughest financial sanctions, expel certain Russian banks from the Society for Worldwide Interbank Telecommunications and Finance (SWIFT), and set major restrictions on Russia’s central bank, prevent it from using international reserves.
The war between Russia and Ukraine caused U.S. stocks to plummet last week, but after a sharp rebound on Thursday and Friday, the stock market almost regained lost ground. Nevertheless, the development of the war between Russia and Ukraine will remain the focus of financial markets this week.
Brent crude hit $105 a barrel last week Dollarbut returns to 100 soon after Dollarthe following. Analysts said the Western sanctions, which did not cover energy and agricultural products, represented limited spillover effects on the global economy and that the pattern before Russia’s invasion of Ukraine — concerns about tighter financial conditions and high inflation — had not changed.
Goldman Sachs estimates that Russia and Ukraine together account for only about 2% of global gross domestic product (GDP). Russia produces 11% of the world’s oil and 17% of its natural gas.
3. US non-farm payrolls report for February
The U.S. will release its February nonfarm payrolls report on Friday, and economists say the report, while important, won’t change the Fed’s policy course.
The market forecast nonfarm payrolls rose by 400,000 in February, and economists expect spring break to come, driving hiring in the leisure and hotel industries, and increasing demand for manpower from manufacturing to specialized business services. The initial value of new employment in January was 467,000.
4. OPEC+ Ministerial Meeting
OPEC+ meets monthly on Wednesday, even as the Ukraine-Russia war briefly pushed Brent to over 100 per barrel last week Dollarbut fell back to 98 per barrel on Friday Dollarmore and more people expect Iran to reach a nuclear deal soon, a lot of oil will flood the market.