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LGT Navigator: De-escalation or tactical maneuver?

March 30, 2022

Talks between Russia and Ukraine that are described as constructive, as well as signals of a possible easing of tensions and lower oil prices, are currently causing cautious optimism on stock markets. Following the latest negotiations in Istanbul, investors on the capital markets are hoping for a certain de-escalation of the conflict. Russia appears to be retreating (for now) in several areas of Ukraine, particularly the capital Kiev. How credible the Kremlin's action is, however, remains questionable, and it could well be a tactical maneuver.

De-escalation or tactical maneuver?

On the New York Stock Exchange, the détente signals in any case ensured a continuation of the recovery and the Dow Jones Industrial left the 35'000-point mark behind immediately at the start of trading. With 35'294.19 points, the Dow went out of trading almost one percent higher than the previous day. The S&P 500 climbed +1.23% to 4'631.60 points and on the Nasdaq, the indices even rose by about +1.7%, so that the technology exchange is trading again at the level of mid-January. While Europe's stock indices rose strongly, the gold price fell below the USD 1'900 mark for the first time since the end of February.

In Asia, stock markets did not present a uniform picture. While prices in Tokyo were under pressure – the Nikkei 225 is down around -1.7% – Chinese indices recovered from recent losses.

Russia complies with coupon payment in US dollar

The Russian Finance Ministry said it has again made an interest payment due on a bond issued in a foreign currency. The coupon of USD 102 million on a foreign currency bond maturing in 2035 has been transferred to the creditors. Since the start of the war in Ukraine, there have been fears in the market that Russia will no longer make its interest payments because of the sanctions. The rating agency Standard & Poor's recently warned that Russia's solvency was in jeopardy, as the sanctions imposed by the West made it virtually impossible for the country to access its extensive foreign currency reserves.

Consumer sentiment in the US remains fragile

Consumer confidence in the US improved somewhat in March as the economy moved in the opposite direction. The sentiment barometer of the New York-based economic research institute The Conference Board climbed slightly more than analysts had expected by 1.5 points to 107.2 (consensus 107.0). However, the assessment remains pessimistic regarding expectations for the next six months.

US house prices continue to rise on a broad basis

In the United States, house prices continued to rise in 20 major metropolitan areas. According to the S&P/Case-Shiller index, prices rose by +19.1% year-on-year in January and by +1.8% month-on-month. However, the cycle of interest rate hikes initiated by the Federal Reserve is likely to slow price increases in the housing market via higher mortgage rates, S&P commented.

Worsening consumer sentiment and inflation fears in France

French consumers were significantly more pessimistic in a recent survey by the statistics office Insee. The consumer confidence indicator fell from 97 points in February to 91 points in March, its lowest level since February 2021, while inflation expectations rose to their highest level since the data series began in 1972.


Economic Indicators March 30

MEZ Country Indicator Last period
09:00 SZ KOF Economic Indicator (March) +105.0
09:00 ESP Consumer Prices (March, y/y) +7.6%
10:00 IT Business Climate (March) +113.4
10:00 IT Consumer Sentiment (March) +112.4
10:00 IT Producer Prices (February, y/y) +32.9%
10:00 SZ ZEW Economic Perspectives (March) +9.0
11:00 EZ Economic Sentiment (March) +114.0
11:00 EZ Business Climate (March) +1.79
11:00 EZ Consumer Confidence (March) -18.7
14:00 GE Consumer Prices (March, y/y) +5.5%
14:15 US ADP Employment Private Sector (March) +475,000
14:30 US GDP Q4 (revision, q/q, annualised) +7.0%


Earnings Calender March 30

Country Company Period
GE BioNTech Annual


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Source: LGT Bank (Switzerland) Ltd.

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