Traders are back on Russia sanctions watch this week – most likely on Wednesday – over civilian killings in northern Ukraine.
While Moscow denied accusations, the United States and Europe planned new sanctions to punish Russia over alleged war crimes. Fresh sanctions may include restrictions on the billions of dollars in energy that Europe still imports from Russia.
European Union may even propose a ban on Russian coal imports. Imposing sanctions on the Russian energy sector has been a challenge for the EU. Some member states highly depend on the country’s energy supplies.
Markets weigh the prospect of new sanctions against Russia in the coming days, raising tighter oil global supply concerns. On top of that, oil prices extend a rally in commodity markets. The global economy‘s path is now highly dependent on how the war in Ukraine progresses.
Apart from Russia sanctions, inflation remains in focus
Apart from the worries tied to the geopolitical front, soaring inflation, high commodity prices, and aggressive monetary tightening are just some things concerning investors. There is a possibility of even higher energy-driven inflation due to the war in Ukraine.
The Fed – and even other most dovish central banks – will probably act aggressively to stamp out inflation. The latest case in point is the Reserve Bank of Australia. Earlier Tuesday, the RBA opened the door to its first interest rate hike in over a decade.
Wednesday is all about the FOMC’s last policy meeting minutes. The focus will remain on market expectations for how aggressive the U.S. central bank will be with the next round of interest rate hikes.
Global markets are otherwise paying attention to Thursday ECB’s release of equivalent minutes.
It is also time to start paying attention to France, which holds the first round of a presidential election this weekend.
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