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March 13, 2022 – rdspinvestments

March 13, 2022

Russian strike on base brings Ukraine war close to NATO’s border

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Russian strike on base brings Ukraine war close to NATO's border© Reuters. Ukrainian servicemen walk near a destroyed bridge as Russia’s invasion of Ukraine continues, in the town of Irpin outside Kyiv, Ukraine, March 12, 2022. REUTERS/Marko Djurica

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By Pavel Polityuk and Natalia Zinets

LVIV, Ukraine (Reuters) -A barrage of Russian missiles hit a large Ukrainian base near the border with NATO member Poland on Sunday, killing 35 people and wounding 134, a local official said, in an escalation of the war to the west of the country as fighting raged elsewhere.

Russia’s defence ministry said the air strike had destroyed a large amount of weapons supplied by foreign nations that were being stored at the sprawling training facility, and that it had killed “up to 180 foreign mercenaries”.

Reuters could not independently verify the casualties reported by either side.

The attack on the Yavoriv International Centre for Peacekeeping and Security, a base just 15 miles (25 km) from the Polish border that has previously hosted NATO military instructors, brought the conflict to the doorstep of the Western defence alliance.

Russia had warned on Saturday that convoys of Western arms shipments to Ukraine could be considered legitimate targets.

Britain called the attack as a “significant escalation,” and U.S. Secretary of State Antony Blinken responded with a post on Twitter (NYSE:) saying “the brutality must stop.”

White House national security adviser Jake Sullivan, speaking on CBS’s “Face the Nation”, warned any attack on NATO territory would trigger a full response by the alliance.

Regional governor Maksym Kozytskyy said Russian planes fired around 30 rockets at the Yavoriv facility.

Russian defence ministry spokesperson Igor Konashenkov said Russia had used high-precision, long-range weapons to strike Yavoriv and a separate facility in the village of Starichi.

“As a result of the strike, up to 180 foreign mercenaries and a large amount of foreign weapons were destroyed,” he said.

The 360-square km (140-square mile) facility is one of Ukraine’s biggest and is the largest in the western part of the country, which has so far been spared the worst of the fighting.

Ukraine, whose aspirations to join NATO are a major irritant to Russian President Vladimir Putin, held most of its drills with Western countries at the base before the invasion. The last major exercises were in September.

In the weeks before Russia’s Feb. 24 invasion, the Ukrainian military trained there, but according to Ukrainian media all foreign instructors left in mid-February, leaving behind equipment.

“The dining room and dormitory were destroyed. So were the barracks,” said Colonel Leonid Benzalo, an officer in the Ukrainian medical reserve who was thrown across the room by one of the blasts. “The most important thing is we’re still alive,” he told Reuters after treating the wounded there.

While Western nations have sought to isolate Putin by imposing harsh economic sanctions and have been supplying Ukraine with weapons, the United States and its allies are concerned to avoid NATO being drawn into the conflict.

“There are no NATO personnel in Ukraine,” the NATO official said, when asked if anyone from the alliance was at the base.

STOCKPILING FOOD

Heavy fighting was reported on multiple fronts.

Air raid sirens wailed across the capital Kyiv and authorities said they were stockpiling two weeks worth of food for the 2 million people who have not yet fled from Russian forces attempting to encircle the city.

Ukraine reported renewed air strikes on an airport in the west and heavy shelling on Chernihiv, northeast of the capital.

Interior Ministry official Vadym Denyenko said Ukrainian forces were counterattacking in the eastern Kharkiv region and around the southern town of Mykolayiv. Reuters was not able to verify those statements.

An American journalist was shot and killed by Russian forces in the town of Irpin, northwest of Kyiv, and another journalist was wounded, the regional police chief said.

Britain’s defence ministry said Russian naval forces had established a distant blockade of Ukraine’s Black Sea coast, isolating the country from international maritime trade.

“We must hold on. We must fight. And we will win,” Ukrainian President Volodymyr Zelenskiy said in a nighttime video address.

Despite the violence, both sides gave their most upbeat assessment yet of prospects for progress at talks held periodically.

“Russia is already beginning to talk constructively,” Ukrainian negotiator Mykhailo Podolyak said in a video online. “I think that we will achieve some results literally in a matter of days.”

A Russian delegate to talks, Leonid Slutsky, was quoted by RIA news agency as saying they had made significant progress and it was possible the delegations could soon reach draft agreements.

Neither side said what these would cover. Three rounds of talks between the two sides in Belarus, most recently last Monday, had focused mainly on humanitarian issues.

Zelenskiy said the countries’ delegations have been speaking daily by video link and a clear aim of his negotiators was to “do everything” to arrange for him to meet with Putin.

‘VIOLENT AND INHUMAN’

In the weeks since the invasion began, Russia has asked China – which has not condemned the assault on Ukraine – for military equipment, the Financial Times and Washington Post cited unnamed U.S. officials as saying.

A spokesperson for the Chinese embassy in Washington said he had not heard of such a request and that the priority was to prevent the situation “from escalating or even getting out of control.”

Russia’s invasion has sent more than 2.5 million people fleeing across Ukraine’s borders and trapped hundreds of thousands in besieged cities.

“It is terrifying how violent and inhuman it is,” Olga, a refugee from Kyiv, told Reuters after crossing into Romania.

Ukraine’s human rights monitor said Russia used phosphorous bombs in an overnight attack on the town of Popasna in the eastern Luhansk region, calling it a “war crime”. She shared a photograph purporting to show the alleged attack. Reuters could not immediately verify any of the reports.

Phosphorus munitions can be used legally in war to provide light, create smokescreens or burn buildings. But its use in populated areas has been a persistent source of controversy.

In eastern Ukraine, Russian troops were trying to surround Ukrainian forces as they advance from the port of Mariupol in the south and the second city Kharkiv in the north, the British Defence Ministry said.

The city council in Mariupol said 2,187 residents had been killed since the start of the invasion. Reuters was not able to verify that toll.

Kharkiv has suffered some of the heaviest bombardment. Videos from one resident, Teimur Aliev, showed bombed buildings lining streets, burned-out cars riddled with shrapnel holes and debris strewn around.

“We will stitch up the wounds and the pain of our country and our city,” said Aliev, a 23-year-old musician. “We’re not going anywhere.”

In Chernihiv, northeast of Kyiv, firefighters rescued residents from a burning building after heavy shelling, video from emergency service – and verified by Reuters – showed.

Moscow denies targeting civilians. It blames Ukraine for failed attempts to evacuate civilians from encircled cities, an accusation Ukraine and its Western allies strongly reject.

Ukrainian Deputy Prime Minister Iryna Vereshchuk said more than 140,000 people had been evacuated from conflict zones, but a humanitarian convoy had been unable to reach Mariupol due to shelling.

The Kremlin describes its actions as a “special operation” to demilitarise and “deNazify” Ukraine. Ukraine and Western allies call this a baseless pretext for a war of choice.

Energy & Precious Metals – Weekly Review and Outlook

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CommoditiesMar 13, 2022 04:36AM ET

Energy & Precious Metals - Weekly Review and Outlook© Reuters

By Barani Krishnan

Investing.com — The ‘Crazy Commodity’ world paused somewhat this week with neither of the two biggest macro assets in the resource universe – oil and gold – going parabolic. 

That said, still redefined market lunacy with a mind-blowing intra-week gain of 96%, before settling up 66% to add to last week’s 19% rise. The metal used in stainless steel and battery-making is up 200% or $32,000 a tonne from a year ago.

Some commodities, including and London-traded , gave back a chunk of recent gains after traders realized there were limits to how much valuations, or consumers’ wallets, could be stretched over fundamentals grossly distorted by the Russia-Ukraine war.

With Vladimir Putin into his third week to prove the West wrong – and Joe Biden and his allies equally determined to squeeze Russia financially dry before that – there seems no quick end in sight to the forthcoming volatility in energy and food prices as speculators test consumers’ patience to breaking limits.

The coming week isn’t going to be any easier. After months of speculation over whether they’ll do it in March, the Federal Reserve is 99.99% certain of doing the first pandemic-era rate hike when its policy-making Federal Open Market Committee convenes this week. 

What remains uncertain is whether Fed Chair Jerome Powell will stick to his “nimble” approach of 25-basis points first or be forced to do more (essentially 50 bp) by hawks that include St. Louis Fed chief James Bullard, and Christopher Waller, one of the central bank’s seven governors. To be sure, the published by Investing.com shows a 94.9% probability of a 25-50 bp increase in the coming week.

Bloomberg used an interesting airplane landing analogy in its commentary this week to explain the economic landing attempted by Powell.

As in the “Miracle on the Hudson”, where Captain Chesley “Sully” Sullenberger safely piloted his crippled U.S. Airways plane to an emergency landing in the frigid waters of Manhattan’s Hudson River in 2009, saving all 155 on board, Powell is attempting his own miracle landing for America’s 330 million people.

The difference for the Fed chair is that this might be a trickier touchdown. His test will be to curb inflation running at 40-year highs by raising interest rates just enough to cool demand – and not to kill it or send the economy into a recession. 

It’s not that the Fed hasn’t done it before. A quarter-century ago, Alan Greenspan – arguably the central bank’s most iconic star ever – pulled off such a soft landing in 1994-95 with a combination of stiff and moderate rate hikes to crush inflationary pressures, although the bond market crashed and Wall Street tanked.

The problem for Powell though, as Bloomberg notes, is that the feat has become markedly more difficult now with the Russian invasion of Ukraine having unleashed turbulence in global financial and energy markets that will be hard to suppress, regardless of the tools in the Fed’s kit – whose remarkable powers the Chair never fails to remind us of at each monthly news conference.

“It’s going to be very tricky,” Moody’s Analytics Chief Economist Mark Zandi was quoted saying, pointing to rising energy bills – along with slumping stock and credit markets – that could also sap consumer demand, increasing the chances of a recession. 

“The economic plane is coming into the tarmac at a very high rate of speed, buffeted by severe crosswinds from the pandemic, with a lot of fog created by uncertainty due to geopolitical events,” Zandi said.

“A 25 basis points rate hike at the March meeting would be a no decision as opposed to a decision … and it’s not going pull the handbrake on the inflation momentum that arguably is being further fueled [by the Russia-Ukraine conflict],” Johan Grahn, head of ETF Strategy at Allianz, told Investing.com.

Initially winning praise for the Fed’s quick stimulus action that helped prevent the Covid‑19 recession from turning into an outright depression, Powell is now the poster-boy for everything gone wrong with inflation – especially after his admission that the central bank had totally misread the problem as being transitory.   

On top of a maximum of seven rate hikes this year – as per the number of Fed meetings – there is a yet-to-be-specified reduction in the Fed’s balance sheet, which now stands at $8.9 trillion after the central bank loaded up on Treasuries and mortgage-backed securities to support the economy since the Covid outbreak in March 2020. 

That action will reduce the cash in the financial system – but it will also bring uncertain consequences for bond and stock markets. The danger is that if inflation doesn’t begin to subside in response to these initial moves, policymakers will end up raising rates too high, sending the economy into a recession and financial markets into a slump.

“When you’re wrong in one direction and you’re painfully wrong, you’re going to have to end up with too much heavy lifting to go in the other direction,” former Fed Governor Lawrence Lindsey was quoted saying by Bloomberg, as he put the odds of a downturn by the end of 2023 at above 50%.

To recap: a quarter percentage point hike is expected to cause little or no turbulence across markets next week, and possibly embolden further risk-takers in stocks to bonds, forex, and commodities. 

A half percentage point hike will have some serious consequences, with gold, possibly even oil, plummeting amid a renewed crash on Wall Street. Inflation could pause briefly too – but more will certainly need to be done by the Fed if doesn’t want any subdued price pressure to come roaring back.

As RBC commodity analyst Michael Tran told the Australian Financial Review, what seemed ridiculous just a month ago now seems possible.

“It is not unfathomable for prices to rocket to $200 a barrel by summer, spur a recession and end the year closer to $50,” he said, referring to growing fears of demand destruction to oil if crude prices kept climbing.

“To be clear, this is not our base case, but such a scenario does not sound implausible today,” Tran said. “Two weeks ago, such a notion would have been ludicrous. Brent traded in a $20 range over the past 24 hours. Nothing sounds crazy anymore.”

Oil: Closing Prices & Technical Outlook

Global oil benchmark settled Friday’s trade up $3.09, or 2.8%, at $112.42 a barrel. For the week, Brent fell 4.6%.

settled up $3.18, or 3%, at $109.20 a barrel on Friday. For the week though, WTI fell 5.8%. 

“The previous week’s was WTI’s chance for glory and a tryst with destiny as prices tested $130 and we’ve seen then a plunge to $103 before a weekly settlement at $109,” said Sunil Kumar Dixit, chief technical strategist at skcharting.com.

Dixit said on the surface of it, the weekly closing in WTI could be considered “extremely bearish” if not for prices closing the week at the 23.6% Fibonacci retracement. 

“Holding above this level can push oil higher to the 38.2% Fibonacci level of $113 and 50% level of $116,” he said.

Further upside for WTI will largely depend on the market’s reaction to this 50% Fibonacci level of $116, as holding above that can extend the recovery to the 61.8% level of $120 and 78.6% level of $124.

“Rejection at the resistance levels of the 50% – 61.8% areas of $116-$120 may push WTI down again to $103,” Dixit warned. “Breaking and sustaining below these levels can expose oil to the $95 and $86 areas, which may be fair value sans risk premia.”

Gold: Closing Prices & Technical Outlook

The most-active gold futures contract on New York’s Comex, , settled down $8.15, or 0.4%, at $1,992.25 an ounce on Friday. For the week, it gained 0.9%.

fell $8.47, or 0.4%, to finish Friday’s trade at $1,988.55. For the week, spot gold rose 0.9%.

Dixit noted that the big move in spot gold that attempted to clear above the $2,074 high was deflated at $2,070, pushing gold down all the way to $1,958 on Friday, although the spot metal managed to settle the week at $1988, some $30 above the day’s low.

“Gold’s rise from $1,977 all the way up to $2,070, a rise of $93, followed by its fall to $1,958, which marked a decline of $112, indicates large volatility on the week,” said Dixit. “This is despite the absence of major percentage changes on the week or record high prices.”

For the week ahead, the trade is likely to monitor price action at between $1,974 and the $1,958 low, Dixit said.

“The minor range to watch is $1,958 to $2010,” he said. “Prices need to break and sustain above $2,010 for a retest of the $2,020 and $2,032 levels, which may be targeted by sellers again to hunt for lower levels.”

On the flip side, he said, weakness below $1,985-$1,980 will indicate selling bias towards a retest of $1,958. 

“Breaking and sustaining below this level, the correction can extend to $1,934 and $1,900. Monday’s early hours of opening in Asia will be interesting to watch as markets are likely to open with gaps.”

Disclaimer: Barani Krishnan does not hold a position in the commodities and securities he writes about.

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Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.

Ukraine war becomes a cudgel in Republican Party’s internal conflict

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World2 hours ago (Mar 13, 2022 06:30AM ET)

Ukraine war becomes a cudgel in Republican Party's internal conflict© Reuters. FILE PHOTO: House Republicans, including Representatives Lauren Boebert (R-CO), Kat Cammack (R-FL), Madison Cawthorn (R-NC), Marjorie Taylor Greene (R-GA), Lisa McClain (R-MI) and Jody Hice (R-GA), who oppose mask mandates march as a group to the Senate c

By David Morgan

WASHINGTON (Reuters) – The war in Ukraine has opened a new front in the U.S. Republican Party’s civil war, with party primary candidates vying to run in the November midterm elections attacking each other for past comments praising Russian President Vladimir Putin.

In Senate and House of Representatives races in at least three states, Republican candidates have been put on the defensive over comments describing Putin as intelligent, Ukrainian President Volodymyr Zelenskiy as a “thug” and Ukraine as not worth defending. They now face criticism at a time when U.S. public opinion strongly supports Ukraine and its president.

Pat McCrory, a leading Republican Senate candidate in North Carolina’s May 17 primary election, lashed out this week at his Trump-backed Republican rival, Representative Ted Budd, in his first TV ad.

“While Ukrainians bled and died … Congressman Budd excused their killer,” McCrory says in the ad, which is interspersed with video clips from a TV interview showing Budd describing Putin as “a very intelligent actor” with “strategic reasons” for the invasion.

The ad also accused Budd, who has described Putin as “evil,” of casting votes “friendly” to Russia.

Budd’s campaign dismissed the McCrory ad in a statement, saying, “Ted Budd presented the sort of level-headed assessment of a foreign crisis you would expect from a U.S. Senator because he knows these are serious times that require strength and substance, not the empty soundbites.”

Before Russian forces moved on Ukraine on Feb. 24, some Republicans felt comfortable echoing former President Donald Trump’s praise for Putin as a strong leader, while denouncing U.S. policy toward Moscow.

Even after the invasion, two Trump allies in the House – Marjorie Taylor Greene and Paul Gosar – participated in a white nationalist conference at which participants applauded Russia’s move on Ukraine and chanted Putin’s name.

Infighting over Putin and Ukraine has exacerbated existing divisions within the party over Trump’s false claims of widespread election fraud in 2020, and a House investigation of the Jan. 6, 2021, attack on the U.S. Capitol by the former president’s supporters.

Trump has been widely criticized for describing Putin’s actions toward Ukraine as “genius” and “pretty savvy” in a Feb. 22 interview.

ATTACK AD

Also in North Carolina, Representative Madison Cawthorn came under fire from his Republican rivals over remarks at a town hall in which he criticized Zelenskiy and Ukraine.

“Remember that Zelenskiy is a thug. Remember the Ukrainian government is incredibly corrupt and is incredibly evil and has been pushing woke ideologies,” Cawthorn said in a video clip aired by WRAL-TV in Raleigh.

“ITS INCOMPREHENSIBLE THAT A MEMBER OF CONGRESS WOULD CALL UKRAINES PRESIDENT A THUG!” tweeted Michele Woodhouse, who is challenging Cawthorn in the Republican primary.

Cawthorn’s office did not respond to a Reuters query seeking comment.

The Republicans are vying to become candidates at the November midterm elections in which control of the U.S. Congress is at stake.

In Utah, independent Senate candidate Evan McMullin, a former CIA officer, attacked Republican Senator Mike Lee in an ad accusing the two-term incumbent of “making us weak and unsafe” in the midst of the current Ukraine crisis by opposing sanctions against Russia and visiting Moscow.

But the actions cited in the ad occurred years before the Ukraine invasion or were mischaracterized, according to the fact-checking website PolitiFact, which judged the ad “mostly false.”

Lee’s office did not respond to a Reuters query seeking comment. But McMullin’s campaign said it stood behind the ad and insisted that Lee has displayed a pattern of appeasing Putin.

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Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.

S.African airline Comair’s fleet grounded indefinitely

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Economy5 hours ago (Mar 13, 2022 12:25PM ET)

S.African airline Comair's fleet grounded indefinitely© Reuters. FILE PHOTO: Passengers wearing protective masks walk to the check-in counters at the O.R. Tambo International Airport in Johannesburg, South Africa, December 22, 2020. Picture taken with a slow shutter speed. REUTERS/Siphiwe Sibeko

By Wendell Roelf

CAPE TOWN (Reuters) -South Africa’s civil aviation regulator grounded Comair’s planes indefinitely on Sunday over unresolved safety issues, in a move that also affects low-cost airline Kulula and British Airways, leaving hundreds of passengers stranded.

A spokesperson for the South African Civil Aviation Authority (SACAA) said it had extended a 24-hour precautionary suspension of Comair’s operator certificate indefinitely.

The suspension was meant to end on Sunday, but Comair has not adequately addressed all the necessary safety issues, the SACAA said.

“This morning we communicated to them (Comair) that their air operator certificate is now indefinitely suspended until they close all of the findings,” SACAA spokesperson Phindiwe Gwebu told Reuters, effectively grounding the company’s fleet of Boeing (NYSE:) aircraft.

Comair said it was unable to confirm when it would start flying again, after working through the night to provide documentation to SACAA following a review of certain policies, systems and procedures.

“This is a huge blow to our customers, employees and the flying public as it effectively takes 40% of the capacity out of the market,” Glenn Orsmond, Comair chief executive said in a statement.

There would be considerable implications for the aviation sector and the country should the suspension be prolonged, he added.

CHARTERED FLIGHTS

Airports Company SA (ACSA), which runs the country’s largest airports, said some of the stranded passengers were placed on chartered flights arranged by BA and Comair, specifically for commuters on the popular Johannesburg and Cape Town route.

“Priority is also given to those passengers who have onward international connecting flights,” Terence Delomoney, ACSA’s group executive operations manager said.

Issuing the precautionary notice on Saturday, the regulator said in the past month Comair had experienced safety problems ranging from “engine failures, engine malfunction and landing gear malfunctions,” among others.

In its investigations, SACAA said it had discovered three so-called “level 1” findings “which pose an immediate risk” and must be addressed immediately.

Gwebu did not elaborate on what outstanding safety issues Comair, which flies local and regional routes from South Africa under the British Airways (BA) livery as part of a licence agreement, needed to address before flying again. Besides flying BA planes, Comair also operates the Kulula brand.

A notice on Kulula’s website showed that Comair had been aiming to resume its schedule by 12 p.m. (1000 GMT) on Sunday, subject to SACAA’s approval.

“We will do everything we can to accommodate customers affected by the suspension on other flights, prioritising vulnerable customers and those who most urgently needed to travel,” Comair said, adding that customers would also be kept informed via text.

Related Articles

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.

Top 5 Things to Watch in Markets in the Week Ahead

Top 5 Things to Watch in Markets in the Week Ahead© Reuters.

By Noreen Burke

Investing.com — The Federal Reserve is widely expected to announce its first interest rate hike since 2018 on Wednesday as policymakers try to balance the twin threats of inflation, which is running at a four-decade high, and economic uncertainty arising from the war in Ukraine. The Bank of England is expected to hike rates again this week, while central banks in Japan, Turkey, and Brazil will also hold policy meetings. The massive rally in commodities looks set to continue, while stocks continue to struggle. Here’s what you need to know to start your week.

  1. Fed rate hike

The Fed has clearly signaled that it intends to deliver a quarter-point interest rate hike after its two-day policy concludes on Wednesday, to combat soaring inflation, which at is far above the Fed’s 2% target.

A larger half percentage point rate hike is no longer on the cards since Russia’s invasion of Ukraine sent commodity prices soaring and triggered major uncertainty in financial markets.

Massive rallies in commodities have added to pressure on global central banks to tighten monetary policy and curb inflation. But this has sparked concerns that higher interest rates will act as a drag on economic growth at a time when price increases are already weighing on consumers.

The Fed will be releasing its updated ‘dot plot’ which tracks projections for interest rates, with investors keen to see how the war is affecting the monetary policy outlook. Investors will also be on the lookout for any guidance on plans for the central bank’s almost $9 trillion balance sheet.

  1. Bank of England

The BOE is expected to for the third time since December after its on Thursday, but officials are expected to opt for another quarter percentage point increase, rather than a larger half-point move.

BOE Governor Andrew Bailey is expected to signal that more rate hikes are coming, with officials keen to mitigate against the risk of high inflation becoming entrenched.

in the U.K. hit an almost 30-year high in January at because of higher energy costs and supply chain bottlenecks.

As with the Fed, investors will be watching for the bank’s assessment of how the war in Ukraine is affecting the outlook for interest rates.

Ahead of the BOE meeting, the U.K. is to release its latest report on Wednesday, with the component likely to be in sharp focus as living costs escalate.

  1. Commodity rally

The recent massive rally in commodity prices could potentially be set to continue for an extended period with a to the war in Ukraine in doubt.

The war and ensuing sanctions on Russia sent oil prices to 14-year highs and prices near records. Prices for and stand near all-time highs, while a doubling of the price of last week forced the London Metals Exchange to in the metal.

U.S. government officials have called on domestic and global producers to ramp up oil output to offset the supply shock and there is talk around potential supply additions from Iran, Venezuela, and the United Arab Emirates.

In the coming week, market watchers will be turning their focus to reports from the and the .

  1. Stocks struggle

The benchmark logged its second straight weekly decline last week while the fell for a fifth straight week as uncertainty over the conflict in Ukraine weighed and attention turned to the upcoming Fed meeting.

Stocks have struggled this year as concerns about the Russia-Ukraine crisis have deepened a sell-off initially fueled by worries over higher bond yields with the Fed on course to tighten monetary policy. The S&P 500 is down 11.8% so far in 2022.

“While investors have accepted the Fed will likely begin raising rates next week, there is still a lack of clarity of how far and how fast the Fed moves from there,” Lindsey Bell, Ally’s Chief Markets & Money Strategist wrote in a note cited by Reuters on Friday.

“With the market taking action (in the form of volatility) and possibly reducing demand, the Fed may not have to move as quickly. Still, the pace of inflation will be the key driver of policy changes for the better part of this year.” 

  1. Central banks

The dovish Bank of Japan is not expected to announce any changes to when its two-day meeting ends on Friday, with inflation still running far behind the rest of the world, for now.

In emerging markets, Turkey’s central bank is expected to keep its one-week repo rate on hold at on Thursday despite reaching a two-decade high of 54% in February. President Tayyip Erdogan’s unconventional approach to monetary policy favors looser rather than tighter monetary policy to combat inflation.

The Central Bank of Brazil also meets on Thursday and is expected to to 11.75%, in what would be the ninth straight increase in a row amid an annual inflation rate of 10%.

Russia’s central bank is to meet on Friday after having already doubled its to an all-time high of 20% following the invasion of Ukraine, in a bid to offset some of the impact from harsh international sanctions. Russia’s stock market will again this week.

–Reuters contributed to this report

Russia counts on sanctions help from China; U.S. warns off Beijing

Russia counts on sanctions help from China; U.S. warns off Beijing© Reuters. FILE PHOTO: A child holds the national flags of Russia and China prior to a welcoming ceremony for Russian President Vladimir Putin outside the Great Hall of the People in Beijing, China, June 25, 2016. REUTERS/Kim Kyung-Hoon

By Mark Trevelyan

LONDON (Reuters) – Russia said on Sunday that it was counting on China to help it withstand the blow to its economy from Western sanctions over the war in Ukraine, but the United States warned Beijing not to provide that lifeline.

Russian Finance Minister Anton Siluanov said sanctions had deprived Moscow of access to $300 billion of its $640 billion in gold and foreign exchange reserves, and added that there was pressure on Beijing to shut off more.

“We have part of our gold and foreign exchange reserves in the Chinese currency, in yuan. And we see what pressure is being exerted by Western countries on China in order to limit mutual trade with China. Of course, there is pressure to limit access to those reserves,” he said.

“But I think that our partnership with China will still allow us to maintain the cooperation that we have achieved, and not only maintain, but also increase it in an environment where Western markets are closing.”

Western countries have imposed unprecedented sanctions on Russia’s corporate and financial system since it invaded Ukraine on Feb. 24 in what it calls a special military operation.

Siluanov’s comments in a TV interview marked the clearest statement yet from Moscow that it will seek help from China to cushion the impact.

But U.S. National Security Adviser Jake Sullivan said Washington was warning China not to provide it.

“We are communicating directly, privately to Beijing, that there will absolutely be consequences for large-scale sanctions, evasion efforts or support to Russia to backfill them,” Sullivan told CNN.

“We will not allow that to go forward and allow there to be a lifeline to Russia from these economic sanctions from any country, anywhere in the world,” added Sullivan, who is due to meet China’s top diplomat Yang Jiechi in Rome on Monday.

Russia and China have tightened cooperation in recent times as both have come under strong Western pressure over human rights and a raft of other issues. Beijing has not condemned Russia’s attack on Ukraine and does not call it an invasion, but it has urged a negotiated solution.

Presidents Vladimir Putin and Xi Jinping met in Beijing on Feb. 4 and announced a strategic partnership they said was aimed at countering the influence of the United States, describing it as a friendship with no limits.

China is Russia’s top export market after the European Union. Russian exports to China were worth $79.3 billion in 2021, with oil and gas accounting for 56% of that, according to China’s customs agency.

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Investors jump into commodities while keeping eye on recession risk

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Stock Markets8 hours ago (Mar 13, 2022 09:00AM ET)

Investors jump into commodities while keeping eye on recession risk© Reuters. A trader works at the New York Stock Exchange (NYSE) in Manhattan, New York City, U.S., March 7, 2022. REUTERS/Andrew Kelly

By David Randall

NEW YORK (Reuters) -Investors are rushing to recalibrate their portfolios for a potentially extended period of elevated commodity prices, as Russia’s invasion of Ukraine sparks eye-popping moves in raw materials that threaten to exacerbate inflation and hurt growth.

Wild moves have been the norm in commodities over the last few weeks, as the war in Ukraine and subsequent sanctions on Russia helped lift oil prices to 14-year highs and prices near records. Prices for wheat and stand near all-time highs, while a doubling of the price of nickel earlier this week forced the London Metals Exchange to halt trading in the metal. [L2N2VE09Q][L2N2VE0JL]

With the U.S. economy already feeling the stress of a broad, post-COVID-19 boost in demand and a quick resolution to the West’s standoff with Russia in doubt, some investors are betting high commodity prices are likely to remain for the foreseeable future.

Investors have sent $10.5 billion into commodities-focused ETFs and mutual funds since the start of the year, including a $2.8 billion gain in the week that ended March 2 that was the largest one-week positive inflow since July 2020, according to ICI data.

“This is a very unique environment that we’re in because you have both demand shocks and supply shocks to the system at the same time,” said Eric Marshall, a portfolio manager at Hodges Capital.

Marshall believes demand for commodities is likely to remain strong even if geopolitical tensions ebb, fueled by factors like electric car battery production, which requires metals such as copper and nickel. A $1 trillion U.S. infrastructure bill passed in November is increasing demand for steel, cement and other commodities, he said.

He is increasing his stake in steel producer Cleveland Cliffs Inc and agricultural companies Tyson Foods Inc (NYSE:) and Archer Daniels Midland (NYSE:) Co, while cutting positions in consumer companies most likely to feel the brunt of higher gas and materials costs.

Massive rallies in commodities have increased pressure on the Federal Reserve and other central banks to tighten monetary policy and fight inflation. This has ramped up worries that doing so will hurt economic growth as rising prices already weigh on consumers.

Investors widely expect the Fed to announce the first rate increase since 2018 at the end of its monetary policy meeting next week and have priced in 1.75 percentage points in tightening this year. Data this week showed consumer prices grew at their fastest pace last month in 40 years. [L2N2VC2QK][FEDWATCH]

Matthew Schwab, portfolio manager of the Harbor Capital All-Weather Inflation Focus ETF, has increased his exposure to oil and metals futures. Prices for industrial metals are likely to stay high due to underproduction during the coronavirus pandemic, while oil companies appear content to trade lower production for higher prices, he said.

“You are able to see the signs of a commodity price rally in the lack of investment over the last decade,” Schwab said.

Mark Khalamayzer, lead manager of the Columbia Commodity Strategy Fund, has increased his exposure to oil and agricultural commodities to the highest limits allowed by his fund prospectus, betting that the conflict in Ukraine will lead to prices spiraling higher.

settled at $112.67 a barrel on Friday and is up 44% since the start of the year.

Even as investors try to align their portfolios to expectations of higher raw materials prices, they are worried about how the rally in commodities could hurt growth.

The risk of a recession led by a sharp cutback in consumer spending rises the longer that oil prices stay high, said Robert Schein, chief investment officer, Blanke Schein Wealth Management.

“If oil prices stay well above $100 per barrel for a few months, the consumer and economy can withstand this, but if $100-plus oil prices last for more than six months, that’s when we will see recession risk surge,” he said.

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Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.

Britons to get 350 pounds a month to open homes to Ukraine refugees

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World3 hours ago (Mar 13, 2022 09:41AM ET)

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Britons to get 350 pounds a month to open homes to Ukraine refugees© Reuters. FILE PHOTO: A demonstrator holds a British flag during a protest against Russia’s invasion of Ukraine, at Parliament Square in London, Britain, March 6, 2022. REUTERS/Henry Nicholls/File Photo

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By Andrew MacAskill

LONDON (Reuters) -Britain will pay people to open their homes to Ukrainians fleeing the Russian invasion as the government moves to deflect anger over its response to the fastest-growing refugee crisis in Europe since World War Two.

The new scheme called “Homes for Ukraine” will let refugees from the war come to Britain even if they do not have family ties, the government said on Sunday.

Britain will pay people 350 pounds ($456) a month if they can offer refugees a spare room or property for a minimum period of six months.

Prime Minister Boris Johnson has sought to portray Britain as helping lead the global response to the Russian invasion – which Moscow calls a “special operation” – but his government has faced criticism over delays in accepting refugees.

Lawmakers from all the main political parties have attacked the government’s insistence that Ukrainians seek visas and biometric tests before arriving in Britain, saying this prioritised bureaucracy over the welfare of those fleeing war.

Under the new scheme, members of the public, charities, businesses and community groups should be able to offer accommodation via a web page by the end of next week, the government said.

“The UK stands behind Ukraine in their darkest hour and the British public understand the need to get as many people to safety as quickly as we can,” Michael Gove, the minister for housing, said in a statement.

“I urge people across the country to join the national effort and offer support to our Ukrainian friends. Together we can give a safe home to those who so desperately need it.”

Anyone offering a room or home will have to show that the accommodation meets standards and they may have to undergo criminal record checks.

In an interview on Sky News, Gove estimated tens of thousands of Ukrainians could come to Britain via this route, with the first arrivals likely in around a week’s time.

Gove said local authorities would be given just over 10,000 pounds per Ukrainian to help fund the additional demands on public services, with extra funding for school-age children.

The number of refugees fleeing Ukraine could rise to more than 4 million, double the current estimates of about 2 million, the UN’s Refugee Agency said last week. Britain has so far issued visas to around 3,000 Ukrainians.

($1 = 0.7671 pounds)

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American journalist killed in Ukraine, Kyiv region police chief says

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World7 hours ago (Mar 13, 2022 10:30AM ET)

American journalist killed in Ukraine, Kyiv region police chief says© REUTERS

LVIV, Ukraine (Reuters) – An American journalist was shot and killed by Russian forces in the town of Irpin in Ukraine’s Kyiv region and another journalist was wounded, Kyiv regional police chief Andriy Nyebytov said on Sunday.

Nyebytov initially said the dead journalist worked for the New York Times. However the Times said that the journalist had previously worked for the paper but was not currently working for it. The Times named the journalist as Renaud.

“We are deeply saddened to hear of Brent Renaud’s death. Brent was a talented photographer and filmmaker who had contributed to The New York Times over the years,” The Times said in a statement posted on Twitter (NYSE:) by its spokesperson.

“Though he had contributed to The Times in the past (most recently in 2015), he was not on assignment for any desk at The Times in Ukraine,” it said.

“Early reports that he worked for Times circulated because he was wearing a Times press badge that had been issued for an assignment many years ago.”

Nyebytov said that Renaud was shot by Russian forces in Irpin, but did not give details of the incident. He did not identify the wounded journalist.

“Another journalist was wounded. We are currently trying to take the victim out of the combat zone,” he said in a statement.

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Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.

Iran attacks Iraq’s Erbil with missiles in warning to U.S., allies

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Iran attacks Iraq's Erbil with missiles in warning to U.S., allies© Reuters. Workers clean the damaged office of Kurdistan 24 TV building, in the aftermath of missile attacks, in Erbil, Iraq, March 13, 2022. REUTERS/Azad Lashkari

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By Amina Ismail and John Davison

ERBIL, Iraq (Reuters) -Iran attacked Iraq’s northern city of Erbil on Sunday with a dozen ballistic missiles in an unprecedented assault on the capital of the autonomous Iraqi Kurdish region that appeared to target the United States and its allies.

The missiles came down in areas near a new U.S. consulate building, according to Kurdish officials. U.S. officials said no Americans were hurt and nor were U.S. facilities hit. Kurdish authorities said only one civilian was hurt and no one killed.

Iranian state media said Iran’s Revolutionary Guards Corps carried out the attack against Israeli “strategic centres” in Erbil, suggesting it was revenge for recent Israeli air strikes that killed Iranian military personnel in Syria.

The attack, in which huge blasts shook windows of homes in Erbil after midnight, was a rare publicly declared assault by Tehran against allies of Washington.

The last time Iran fired missiles directly at U.S. facilities was when it struck the Ain Al Asad air base in western Iraq in January 2020 – a retaliation for the U.S. killing of Iranian commander Qassem Soleimani.

Sunday’s attack comes as talks to revive the 2015 Iran nuclear deal face the prospect of collapse after a last-minute Russian demand forced world powers to pause negotiations for an undetermined time despite having a largely completed text.

It also comes days after Israel carried out an air raid in Syria which the IRGC said killed two of its members and for which it vowed retaliation.

‘RESPONSE TO ISRAEL’

The IRGC issued a statement about Sunday’s attack which was reported by Iranian state media.

“Any repetition of attacks by Israel will be met with a harsh, decisive and destructive response,” it said.

The Iraqi Kurdish regional government said the attack only targeted civilian residential areas, not sites belonging to foreign countries, and called on the international community to carry out an investigation.

Iraq’s foreign ministry summoned the Iranian ambassador to Baghdad in protest.

A U.S. State Department spokesperson called it an “outrageous attack” but said no Americans were hurt and there was no damage to U.S. government facilities in Erbil.

France’s foreign ministry said the move threatened efforts to conclude nuclear talks with Iran.

In another sign of derailing regional diplomacy, Iran said on Sunday it was suspending a fifth round of talks due this week in Baghdad with regional rival Saudi Arabia.

U.S. forces stationed in a section of the Erbil International Airport complex have in the past come under fire from rocket and drone attacks that Washington blames on Iran-aligned militia groups, but no such attacks have occurred for several months.

Asked about Sunday’s attack, Israel’s military said it did not comment on reports in the foreign press and the prime minister’s office declined to comment.

BATTLEFIELD IRAQ

Iran has not fired ballistic missiles at U.S. forces since its January 2020 retaliation attack after the U.S. killing earlier that month of Soleimani at Baghdad airport. No U.S. personnel were killed in that attack but many suffered head injuries.

Iran-backed Shi’ite Islamist militias have since Soleimani’s death regularly attacked U.S. forces stationed in Iraq and neighbouring Syria. Washington has on occasion retaliated with air strikes.

Some observers said Sunday’s attack was retaliation against Israel and not aimed at the United States.

“Iran had carried out attacks against American targets and did not shy away from publicizing this,” said Hamidreza Azizi, Visiting Fellow at the German Institute for International and Security Affairs.

“I see this more as a warning sign to Israel and a show of force in the negotiations.”

Iraq has been rocked by chronic instability since the defeat of the Sunni Islamist group Islamic State in 2017 by a loose coalition of Iraqi, U.S.-led and Iran-backed forces.

Since then, Iran-aligned militias have regularly attacked U.S. military and diplomatic sites in Iraq, U.S. and many Iraqi officials say. Iran denies involvement in those attacks.

(Amina Ismail reported from Erbil, John Davison and Ahmed Rasheed reported from Baghdad; Additional reporting by Yasmin Hussein and Ahmed Tolba in Cairo and Phil Stewart in Washington, Ari Rabinovitch in Jerusalem; Editing by Louise Heavens, Susan Fenton and Hugh Lawson)

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