Global Markets Newsletter – March 2022

March was a full-of-war month in Ukraine after the invasion of Russia which caused severe volatil-ity in the financial markets, in commodities, in the energy prices and also created political turbu-lence. The western world tried to isolate Russia but the sanctions posed have a boomerang effect in the west especially in Europe. Threats and dec-larations from both parties did not help markets regain stability. Bonds were also weak, and Feder-al Reserve Bank made its first move in the interest rate hike cycle. The increase was 0.25-0.50% but was relative to the bank’s program that was im-plicitly announced some months ago.

In the US, economic releases were mixed. Factory orders were up by 1.4%, natural gas storage was diminished by 139bln c.f., unemployment was also better by 0.2% to 3.8% while change in non-farm payrolls were up 654k (from 481k) which points less unemployment in the coming month. Exports diminished by $4bln as much as imports in-creased reaching $314.09bln. Inflation was up at 7.9% from 7.5% for February and retail sales in-creased also by 17.62% (from 14%).

In Europe, the war had a greater impact not only because of its geographical proximity to Ukraine and Russia but also to its impact in energy prices as large part in Europe imports Russian natural gas. For these reasons, the European Union decided to stop gradually its dependance in natural gas from Russia until 2026. However, 2026 is far enough for Europe to suffer from implications which are expected to be severe. In the economic releases, Eurozone inflation was announced at 5.6%, retail sales in January up at 7.8% and the GDP for the last quarter of 2021was increased by 4.6%.

In Greece, the government announced measures to subsidize the increase in fuels concerning low and mid-class level citizens. Concerning stocks, the exchange moved in high volatility closing at around 880 levels. Bonds were weak and hit enough as yields have gone up.

The EUR/USD moved towards the 1.10 mark, and it is expected to continue towards 1.08 in the sec-ond quarter of 2022 depending on interest rates policy.

We hold excess liquidity awaiting proper timing to invest in US stocks in energy and technology sec-tors.

S&P-500 (3 month graph)
EuroStoxx-50 (3 month graph)
EUR/USD  (3 month graph)

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