Tradingview Weekly Market Wrap Monday 28 March 2022

Share On Facebook
share on Linkedin
Print

Despite geopolitical tensions, risk-on is back on the market: equities rally, while defensive assets such as Treasuries and the Japanese yen suffer significant declines. At the same time, financial markets have continued to position themselves in favor of tighter monetary policy and, as a result, bond yields have soared, especially in the US.

©

The dynamics of the 10-year and 2-year Treasury yield curve indicate it could soon invert, a reliable sign of an impending recession. Two measures of the US Treasury yield curve have moved in opposite directions. The last time the 3-month/10-year curve flipped was in February 2020. A month later, the Fed cut the benchmark overnight lending rate to near zero as the coronavirus pandemic wreaked economic havoc around the world.

As far as the commodities market is concerned, Russia will refuse to accept payments for natural gas supplies in committed currencies, including dollars and euros. A transparent payment procedure will be available to all foreign consumers, including the purchase of rubles on the Russian domestic foreign exchange market. The Bank of Russia and the Government will determine the procedure for transactions within one week.

It should be noted that the list of “hostile countries” includes 4 of the 5 largest importers of Russian gas – Germany, Italy, Austria, and France. The “unfriendly countries” accounted for $43 billion of Gazprom’s $54.2 billion pipeline gas sales in 2021. A German spokesman called Russia’s decision a “violation of treaties” and said the country would discuss further measures with its European partners. Austrian energy company OMV, Gazprom’s former partner in the Nord Stream 2 project, plans to continue paying for gas supplies in euros.

Speaking of the economic outlook, IMF expects global GDP to continue to grow this year without slipping into recession. It estimates that countries whose economies have recovered quickly from the effects of the pandemic “are in a stronger position to cope with the consequences of this shock” and are more likely to have higher economic growth rates. At the same time, countries that have not yet been able to overcome the crisis caused by the pandemic “will suffer even more” and could face recession.

In its January report, the IMF worsened its forecast for global GDP growth this year by 0.5 percentage points (p.p.) from its October estimate. The Fund’s analysts thought that this year’s global GDP growth rate would be 4.4%, while in the October forecast this indicator was 4.9%. In 2023, the IMF expected growth of 3.8%.

 

CLICK HERE TO REGISTER FOR FREE ON ADVFN, the world's leading stocks and shares information website, provides the private investor with all the latest high-tech trading tools and includes live price data streaming, stock quotes and the option to access 'Level 2' data on all of the world's key exchanges (LSE, NYSE, NASDAQ, Euronext etc).

This area of the ADVFN.com site is for independent financial commentary. These blogs are provided by independent authors via a common carrier platform and do not represent the opinions of ADVFN Plc. ADVFN Plc does not monitor, approve, endorse or exert editorial control over these articles and does not therefore accept responsibility for or make any warranties in connection with or recommend that you or any third party rely on such information. The information available at ADVFN.com is for your general information and use and is not intended to address your particular requirements. In particular, the information does not constitute any form of advice or recommendation by ADVFN.COM and is not intended to be relied upon by users in making (or refraining from making) any investment decisions. Authors may or may not have positions in stocks that they are discussing but it should be considered very likely that their opinions are aligned with their trading and that they hold positions in companies, forex, commodities and other instruments they discuss.

Leave A Reply

 
Do you want to write for our Newspaper? Get in touch: newspaper@advfn.com

By accessing the services available at ADVFN you are agreeing to be bound by ADVFN's Terms & Conditions

P: V: D:20220928 09:54:33