February 14. Gold has risen to a maximum of three months due to geopolitics

Gold prices jumped on Monday amid increased demand for protective assets due to high geopolitical tensions on the border of Russia and Ukraine.

In particular, the precious metal quotes reached the level of $1.864.85 per ounce, which became a three-month high.

Over the weekend, it became known that the adviser to the American president on national security, Jake Sullivan, said that Russia has the opportunity to attack Ukraine without waiting for the end of the Olympics in Beijing. After that, a telephone conversation took place between the Presidents of the United States and Russia Joe Biden and Vladimir Putin, but he could not ease the tension.

The American president ruled out the possibility of sending American soldiers to Ukraine, but threatened Moscow with large-scale sanctions in the event of an invasion. At the same time, Russia continues to deny its intention to attack Ukraine.

Despite the departure of investors in the assets of the «safe haven», the growth of gold is restrained by the strengthening of the dollar. The dollar is also considered a reliable asset, plus it receives support due to expectations of an imminent increase in the base interest rate of the US Federal Reserve System.

February 16. Inflation in the UK has reached an almost 30-year high of 5.5%

UK consumer prices rose at their fastest annual pace in nearly 30 years in January, putting more pressure on households and increasing the chances that the Bank of England will raise interest rates for the third consecutive meeting. Since December, the regulator has already raised interest rates twice: from 0.1% to 0.5%. Analysts expect that the rate may be increased to 0.75% or 1% as early as March.

According to the Office for National Statistics, the annual rate of consumer price inflation rose to 5.5% – the highest level since March 1992. Analysts predicted that inflation would remain at the December 5.4% level.

Core inflation (excluding volatile prices for energy, food, alcohol and tobacco) rose to 4.4% in January from 4.2% in December, which is the highest since 1997.

Earlier this month, the Bank of England revised its inflation forecasts and assumed that inflation would peak at around 7.25% in April (amid a 54% increase in electricity costs). High energy prices have so far been the strongest contributor to rising inflation in the UK, although supply chain problems have also driven up prices for many other goods.

The British central bank does not expect inflation to return to the 2% target until early 2024, although most economists believe that inflation will still fall faster.

The UK is not alone in the sharp rise in the cost of living. Consumer price inflation in the US reached a 40-year high of 7.5% in January, while inflation in the eurozone was 5.1% (which is the highest since the creation of the single European currency).

February 22. Germany decided to block Nord Stream 2

German Chancellor Olaf Scholz announced the suspension of the Nord Stream-2 certification after Russia recognized the independence of the Donetsk and Lugansk People's Republics (DPR and LPR).

In addition to the announcement of the blocking of the project, Scholz announced a decision on the first package of additional sanctions against Moscow.

Against the background of this news, the cost of gas in Europe has started to rise sharply. The current quotes of «blue fuel» are again located near the level of $1,000 per thousand cubic meters.

Recall that the Nord Stream-2 gas pipeline was planned to be put into operation at the end of 2019. At the same time, Ukraine, Poland, the Baltic states, as well as many European countries opposed the new supply route. Opponents of this Russian project have repeatedly stated that the gas pipeline is not an economic project, but a geopolitical lever of Russia's influence on Ukraine.

However, Russia has repeatedly denied these claims, emphasizing the need for reliable gas supplies to European countries, which the Ukrainian gas transportation system cannot provide.

In September 2021, the pipeline was fully completed, after which an application for certification was submitted. However, today Germany still refused the certification process against the background of a sharp deterioration in the geopolitical situation on the border with Ukraine. At the same time, Russia doubts that the European Union will be able to survive without Russian fuel: with such a policy, Europeans will have to pay about 2,000 euros per thousand cubic meters of gas.

February 21. Bitcoin collapsed below $38 thousand

The value of the most popular cryptocurrency collapsed again on Monday, reaching $37,400. Bitcoin and other cryptocurrencies have been under pressure lately mainly due to the situation around Ukraine.

However, the impetus for a sharp drop in the exchange rate today was the news of an attack on the OpenSea NFT exchange, as a result of which attackers stole hundreds of non-interchangeable tokens with a total value of more than $1.7 million. However, the OpenSea platform itself stated that it was not hacked, and users were attacked by scammers and gave them their tokens themselves.

«As far as we can tell, this is a phishing attack. We don't think it's related to the OpenSea website,» OpenSea Executive Director Devin Finzer said.

As a result of today's collapse in prices, the capitalization of the cryptocurrency market fell by about $70 billion per day. During the day, the value of bitcoin recovered somewhat – to the level of $39200.

Ethereum, the second largest cryptocurrency by capitalization in the world, dropped by about 3% to $2,666. Other popular digital currencies, such as BNB, XRP and Cardano, lost about 5% in price on average.

February 25. What is the risk of the Ukrainian crisis for investors?

Since the beginning of 2022, the main «headache» of investors has been the return of volatility to the market: the oil market is showing growth to multi-year highs, as well as gold, stocks and indices are rising and falling, and the crypto market has reached a minimum where bitcoin can no longer serve as a reliable «safe haven asset».

At the same time, investors have been worried about another news in recent days – Russia's invasion of the territory of Ukraine, which led to a fall in the ruble exchange rate and the suspension of the Moscow Stock Exchange. Analysts are closely monitoring the development of events and advise only one thing so far – not to give in to panic.

«Although Russia and Ukraine will dominate the news in the near future, they will not determine the medium– and long-term direction of the market,» says Tom Essey, founder of the newsletter The Sevens Report.

The United States and its allies have so far announced a modest first stage of sanctions, to which the market reacted rather restrainedly. However, in the event of an escalation of the conflict, consumers and companies may refrain from loans, which will undoubtedly hit the banks.

In addition, the shares of the tourism sector and the leisure sector may suffer, since during global crises, customers are usually not interested in travel and entertainment.

Analysts believe that US Treasury bonds and Japanese government bonds may become the most resistant to the shock. Experts also suggest that the investment portfolio is likely to suffer due to a possible tightening of the policy of central banks and a slowdown in economic growth, and not because of the Ukrainian conflict itself.

March 3. Brent rose to $118 per barrel for the first time in nine years

The oil market continues to grow, updating all new highs. Today, Brent oil quotes have reached the level of $118.20 per barrel for the first time since February 2013. The cost of North American WTI oil rose to $114.35 per barrel.

Oil is getting more expensive against the background of a shortage due to the refusal of customers to purchase Russian raw materials. Analytical companies report that almost 70% of Russian oil trade has been frozen to date. Buyers are boycotting Urals oil, despite the large discount to the market (about $19) and the fact that the sanctions did not directly affect the energy sector.

Further deterioration of the situation in Ukraine will lead to the fact that an increasing number of major players in the oil market will withdraw from oil and gas projects in Russia and look for alternative sources of supply. And this will contribute to the continued growth of oil prices. To date, the American company Exxonmobil, the British-Dutch Shell, the British BP and the Norwegian Equinor have left the Russian market.

To reduce high prices, members of the International Energy Agency (IEA) have agreed to sell 60 million barrels of oil from national reserves. The US Department of Energy also decided to release 30 million barrels from the country's strategic reserve.

At the same time, the OPEC+ countries at yesterday's meeting decided not to accelerate the pace of increasing oil production and decided to maintain the plan to increase production quotas in April by 400 thousand barrels per day. The organization noted that the current fundamental indicators of the market and its future prospects indicate a good balance, and the current volatility is only a consequence of current geopolitical events.

March 2. Buyers are boycotting Russian oil, despite a huge discount

According to analysts, large oil buyers are boycotting Russian Urals oil because of the situation in Ukraine, despite the fact that Russia offers a discount to the market of up to $20 per barrel. Experts note that about 70% of Russian oil exported is difficult to find buyers.

And although American and European sanctions do not restrict energy exports from Russia, ordinary buyers prefer to look for alternative sources of supply. To date, only a few refiners and traders buy Russian oil, but a sharp increase in the cost of freight and the appearance of «military» premiums for risk insurance significantly complicate transactions.

Europe is mainly switching to oil from the Middle East. Until now, European countries were the largest export market for Russian oil (the region accounted for about 53% of supplies). Another 39% of exports go to Asia.

At the same time, it has already become known that Asian countries are also gradually abandoning Russian oil. In particular, the Times of India newspaper reported that the country's largest oil refining company ****** Oil Corp. it will no longer purchase Russian oil, as well as oil from Kazakhstan on FOB terms (the costs of cargo delivery to the port of shipment are taken into account), since these conditions do not take into account the increase in the cost of freight and risk insurance.

The pressure on the energy sector is also exerted by gas, the cost of which has soared by 57% in Europe today – to $ 2,227 per thousand cubic meters. German Economy Minister Robert Habeck said that the worst-case scenario of sanctions against Russia has not yet materialized, as the country continues to export gas. At the same time, he added that it is necessary to prepare for the worst-case scenario. It is worth noting that Russia provides about 40% of gas supplies to Europe.

March 11. Gold is getting cheaper as international tensions decrease

At the end of the week, gold shows a decline of more than 1% amid the weakening of geopolitical international tensions.

The current price of the April precious metal futures on the New York Comex exchange is $1981 per ounce. May silver futures fell to $26,117 per ounce.

The world stock and commodity markets today react mainly to the statement of Russian President Vladimir Putin that there are certain positive developments in negotiations with Ukraine. He stated this at today's meeting with his Belarusian counterpart Alexander Lukashenko.

Traditionally, gold is used by investors as a safe haven asset, and on such positive news, many market participants began to switch to riskier instruments. Analysts note that the advantage of gold at the current level of foreign policy risks is rapidly decreasing.

At the same time, experts suggest that the sanctions imposed against Russia in the near future may further affect supplies, which will push commodity assets to growth.

March 10. Inflation in the US has updated the maximum in 40 years

According to the US Department of Labor, annual inflation in the country accelerated to 7.9% in annual terms by the end of February and reached its highest since 1982.

Last month, inflation increased by 7.5%. On a monthly basis, consumer prices rose by 0.8%.

The annual figure is still at the records of forty years ago, now it is the highest since January 1982. The value of January was a record since February 1982.

The indicators in annual and monthly terms coincided with analysts' forecasts.

It is worth noting that core inflation in the United States (excluding food and energy prices) for the year was 6.4%, and for February – 0.5%.

Food prices in the United States rose by 1% in February, energy prices rose by 6.7%. Over the year, food has risen in price by 7.9%, and energy – by 37.9%.

March 16. Economist named three signs of the end of dollar dominance

Economist Henrik Müller said that the US dollar may lose its status as the world's main currency. Doubts about the happy future of the US dollar are caused by several factors at once. Let's consider the main ones.

First, inflation can seriously damage international confidence in the dollar and shake investor confidence in the value of the US currency. Müller stressed that the current inflation in the United States is at the level of 8% (and this is not the limit), and the further development of the situation depends on the actions of the Federal Reserve System.

Anti-Russian sanctions may also have a negative impact on the dollar. To date, the most serious measure against Russia is the freezing of Moscow's foreign exchange reserves in other central banks. Up to this point, such a step had never been taken in this form before. And if fears spread that Washington may confiscate foreign currency assets of other countries at any moment, the dollar may come under extreme pressure.

And the situation in Ukraine itself does not bode well for the dollar in the long term. As events unfold, the balance of forces in the financial market is changing – along with the global financial institutions of the United States, new blocs from sovereign countries with fragmented markets appear and strengthen their influence.

March 18. India has increased the import of Russian oil by 4 times

Analysts note that Russian oil exports to India increased fourfold in March, which indicates a redistribution of global energy flows after the situation around Ukraine.

India, which is the third largest country in the world in terms of energy consumption, bought several batches of oil at once, as buyers from Europe refused Russia's resources due to sanctions. In particular, the Russian Federation exported 360 thousand barrels per day to India in March, which is almost 4 times more than last year.

The United States reacted negatively to such actions: White House spokeswoman Jen Psaki said that India could be on the verge of a historical past if it buys Russian oil. At the same time, Psaki admitted that these purchases would not violate US sanctions.

Last week, Russian Deputy Prime Minister Alexander Novak, during a telephone conversation with Indian Oil Minister Hardeep Singh Puri, discussed further cooperation and joint areas of work in the fuel and energy sector. At the moment, Russian exports of oil and petroleum products to India have approached $1 billion, and representatives of the countries hope for an effective increase in this indicator.

The Indian authorities said they are developing a mechanism for buying and selling raw materials in rupees and rubles, which will significantly facilitate trade after Western restrictions on international currency transfers to and from Russia.

March 23. Annual inflation in the UK has reached its highest since 1992

According to the report of the National Statistical Service of the United Kingdom, the consumer price index in February in the UK showed an increase of 6.2% compared with 5.5% in the previous month. This was the highest figure in the last 30 years. On a monthly basis, consumer prices rose by 0.8% after falling by 0.1% in January.

Analysts expected annual inflation to accelerate to 5.9%, and monthly consumer prices were expected to rise by 0.6%.

At the same time, the CPIH index (inflation taking into account homeowners' expenses for housing maintenance) was 5.5% after 4.9% a month earlier. In February, prices for this index increased by 0.7%.

Analysts believe that the growth of the consumer price index in Britain may even be above 10%, given the continuing rise in gasoline prices in the country due to anti-Russian sanctions imposed as a result of the events in Ukraine. Last week, amid increasing geopolitical tensions in the world, the Bank of England raised its base interest rate to 0.75% from 0.5% for the second time since February. Then the regulator warned that inflation could reach 8% in April.

March 25. The US. Main news: stock market, macro statistics

The stock market of the United States is showing a certain upswing: support is provided by the position of NATO not to physically interfere in the geopolitical crisis, as well as the manifestation of allied solidarity within the alliance.

Additional optimism was brought by statements by the President of the Federal Reserve Bank of Minneapolis, Neil Kashkari, that he expects 7 rate hikes by 25 basis points this year. At the same time, the representative of the Fed noted the likelihood of overdoing it on the issue of tightening monetary policy.

Chicago Fed President Charles Evans expects a similar scenario with 3 more increases in 2023, but at the same time excludes the possibility of a 50 bp rate hike.

American macrostatistics turned out to be contradictory. The number of initial applications for unemployment benefits decreased by 28 thousand last week (to 187 thousand), which is the lowest value since 1969. Orders for durable goods decreased by 2.2% in February, and excluding defense orders – by 2.7%.

Business activity, on the contrary, shows growth already in March. According to preliminary estimates, the index of business activity in the service sector in February increased from 56.5% to 58.9%, and the manufacturing PMI increased from 57.3% to 58.5%.

From corporate news, it is worth highlighting the growth of Uber shares by 4.96% after the announcement that the company has agreed to subscribe all taxi drivers in New York to its app. All sectors of the S&P 500 showed growth. The strongest were communications (+1.69%), information technology (+2.71%) and materials (+1.96%).

April 1. Does Nord Stream-2 have a future?

Against the background of acute geopolitical tensions in Europe, the future of the Nord Stream-2 gas pipeline is now in great doubt, say energy analysts.

The 1,234 km (2,468 km) offshore gas pipeline was designed to double gas supplies between Russia and Germany. However, in November last year, the German energy regulator suspended the certification process of the gas pipeline, and in February, with the beginning of the Russian military operation in Ukraine, it froze it altogether.

Analysts note that the large-scale geopolitical crisis has put an end to any joint projects and business partnership between Russia and the West. And Nord Stream-2, worth $11 billion, became one of the first victims of anti-Russian sanctions.

Moreover, the European Union has stated that by the end of 2022 it is going to reduce the import of Russian gas by two–thirds, and by 2030 it is going to completely end dependence on Russian imports of fossil fuels. At the same time, Russian President Vladimir Putin announced the termination of gas exports to «unfriendly» countries if gas payments are not made in rubles. The main EU countries responded to this demand with a refusal.

Many analysts and politicians doubt the likelihood of the resumption of the gas pipeline. It is obvious that the future fate of the Nord Stream-2 will depend on how the Ukrainian crisis ends, and who will ultimately dictate the conditions.

There are assumptions that the Nord Stream-2 will be able to be used for the transportation of hydrogen in the future, and Russia will be a potential supplier. However, this method of using the gas pipeline will depend on the decision of Germany itself – whether it will eventually want to revive energy relations with Russia using next-generation fuel under the flag of decarbonization.

March 31. Oil declined sharply after a significant increase

On Thursday, oil prices showed a sharp decline after the publication of the weekly report on oil reserves in the United States. In addition, traders are waiting for Washington to announce measures to support American consumers amid rising energy prices.

Brent oil quotes fell from the level of $112 per barrel to $105.12 in just a few hours. By Thursday morning, the price had recovered somewhat to $107.22 per barrel. The cost of North American WTI oil decreased from $108 to $100.55 per barrel. The current WTI quote is $102.56.

Today, the White House is to present a package of measures aimed at reducing energy prices on the American market. The Biden administration is considering releasing approximately 1 million barrels of oil per day from U.S. strategic reserves within a few months to combat rising gasoline prices and supply shortages.

At the same time, analysts note that the rise in prices and other problems caused by the Ukrainian crisis are of a medium- and long-term nature, while the release of oil from strategic reserves is only a short-term solution.

Another factor influencing the oil market was yesterday's report from the US Department of Energy, according to which commercial oil reserves in the country fell by 3.45 million barrels per week. Experts expected a less significant decrease – by 2 million barrels.

At the same time, gasoline reserves increased by 785,000 barrels and amounted to 238.83 million barrels, distillate reserves increased by 1.4 million barrels to 113.53 million barrels. Analysts predicted a decrease in gasoline stocks by 1.6 million barrels and a drop in distillate stocks by 1.5 million barrels.