Tuesday 1st March 2022
The sanctions against Russia are taking their toll on Russia, with moderate contagion to the rest of the world, but its early days. NAB’s Rodrigo Catril says the reaction in markets highlights how much more Europe is exposed, with increasing demand for US dollars. On today’s podcast there’s discussion about the impact on markets, who is exposed to risk and whether today’s prices reflect an event which could rapidly escalate, the role China will play and the fate of the Aussie dollar in the midst of all this.
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A very slight glimmer of hope on inflation
Bond markets have reacted to the softer than anticipated core CPI read for the US, but NAB’s Taylor Nugent says it won’t deflect the course of the Fed. Ivan Colhoun takes us through yesterday’s NAB Business Survey. Later today, two banks who might lift rates by 50 bp – the Bank of Canada (almost certainly) and the RBNZ (possibly).
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Powell gives no answers, bond yields climb again
Bond yields are on the rise in the US and Australia. NAB’s David de Garis says, in both cases, it’s been disappointment in the central banks for not doing more to keep control. Inflation fears have been fuelled further by OPEC+ failing to ease production cuts and sending prices higher.
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Turnaround in bonds ahead of FOMC this week
Bond yields have fallen slightly. NAB’s Tapas Strickland suggests it might be down to expectation of more moderate language from the Fed as they try and rein in the response to their recent hawkish stance.
