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LGT Navigator: Russia attacks Ukraine

February 24, 2022

Russian forces, acting on orders from President Putin, shelled several cities in Ukraine today with missiles and landed troops on Ukraine's southern coast. Explosions were heard in the Ukrainian capital, Kiev, and Ukrainian President Zelensky declared a state of war. Stock prices in Asia slumped, while gold prices soared after Putin's speech. Brent oil surpassed USD 100 per barrel for the first time since 2014.

Russia attacks Ukraine

Russia has launched a large-scale invasion of Ukraine. Putin said on state television, “Russia cannot feel secure, cannot develop and cannot exist if a constant threat emanates from the territory of modern Ukraine.” Media reported military command centers in Kiev were hit by missiles and Russian troops landed in the southern port cities of Odessa and Mariupol. Ukrainian President Volodymyr Zelensky imposed martial law and said Russia had carried out missile attacks on Ukrainian infrastructure and that explosions could be heard in many cities.

US President Joe Biden said Putin has chosen premeditated war and the United States and its allies will respond unitedly and decisively. The world will hold Russia accountable, he said. Biden, however, ruled out deploying US troops in Ukraine but announced Thursday he would announce more sanctions against Russia, in addition to financial measures imposed this week.

NATO Secretary General Jens Stoltenberg strongly condemned Russia's “reckless and unprovoked attack” on Ukraine and said NATO allies will consult immediately.

EU leaders had already called a special summit for this evening yesterday. 

Share prices slump worldwide, oil price, gold, and US dollar rise

On Wall Street, fears of a military strike by Russia had already caused great nervousness. The Dow Jones Industrial closed 1.4% lower at 33,131.76 points and fell at times to the lowest level since April 2021. The S&P 500 went -1.84% lower at 4,225.50 points out of trading and on the Nasdaq, the indices lost about -2.5%. On Asia's stock exchanges, share prices are weakening across the board. In Tokyo, the Nikkei 225 index is currently about -1.8% in the red and in Hong Kong, the Hang Seng loses more than -3%. The stock futures point to a clearly negative opening on Europe's stock exchanges. The EuroStoxx 50 futures and the German DAX futures fell in early trading by more than -3.5%. In contrast, the US dollar, the gold price, and oil prices rose sharply in some cases. Brent crude oil futures rose more than +3.5% on Thursday, topping USD 100 per barrel for the first time since September 2014. West Texas Intermediate climbed +4.6% to USD 96.22 per barrel, its highest level since August 2014, while gold gained around +1.7% to reach its highest level since early January 2021.

Putin insists on Russian security interests

Kremlin leader Vladimir Putin accused the West of ignoring Russian security interests and, for his part, announced a “strong response” to the sanction. He said Moscow remains ready “for direct and open dialogue, for a search for diplomatic solutions,” but that Russia's interests and security are unconditional. Ensuring Russia's defense capability remains the most important state task, Putin stressed. Russia continues to call for an end to the eastward expansion of the Western military alliance NATO and a renunciation of the admission of neighboring Ukraine.

The Kremlin also reacted to statements by UN Secretary-General António Guterres, who condemned the escalation in the Ukraine conflict and called for compliance with international law. Russia's Foreign Minister Sergei Lavrov accused the UN Secretary General of bowing to pressure from the West and making statements that do not correspond to his status and powers under the UN Charter. The UN Secretary General must maintain neutrality and is obliged to promote direct dialogue between the conflict states, Lavrov said.

Inflation in the eurozone reaches new record high at the beginning of the year

Consumer price inflation in the eurozone rose further in January to +5.1% from +5.0% in December. Inflation thus reached its highest level since the introduction of the euro in 1999. Inflation continued to be driven by energy prices, which rose by almost +30% over the year. By contrast, the core rate, i.e. excluding energy and food prices, declined to +2.3% in January from +2.6% in December. The European Central Bank (ECB) had recently expressed increasing concern about the potential sustainability of the inflation trend and financial markets are now expecting an interest rate turnaround before the end of this year.

New Zealand's central bank raises interest rates for the third time in a row

The Reserve Bank of New Zealand is continuing to tighten monetary policy and raised its key interest rate for the third time in a row by a further 25 basis points to +1.0%. The new rate hike was expected on the capital markets. In addition, the Reserve Bank of New Zealand held out the prospect of further interest rate hikes and a reduction in the central bank's balance sheet.


Economic Indicators February 24

MEZ Country Indicator Last period
08:45 FR Consumer Confidence (February)  +99.0
14:15 UK Bank of England Governor Bailey
14:30 US GDP Q4 (q/q, annualized, revision) +6.9%
14:30 US Fed Chicago National Aktivity Index (January) -0.15
14:30 US Initial Jobless Claims (weekly) 248,000
16:00 US New Home Sales (January, m/m) +11.9%


Earnings Calender February 24

Country Company Period
SZ Adecco Annual
GE Deutsche Telekom Annual
GE Mercedes-Benz Annual
FR AXA Annual
FR Scor Annual
FR Accor Annual
FR Bouygues Annual
FR Saint-Gobain Annual
BE Anheuser-Busch InvBev Annual
ESP Telefonica Annual
UK Lloyds Banking Annual
UK Anglo American Annual
UK Centrica Annual
UK Rolls-Royce Annual
US Moderna Q4
US Dell Q4


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