The Russian military has now made it to the Ukrainian capital of Kyiv. Reports this morning show a number of explosions in the city where the 40 mile long Russian military convoy was heading in the last 48 hours.
This has further boosted the price of oil which will have a direct affect on global consumers and more importantly, global inflation readings. Most countries provide two readings of inflation each month. One with fuel and the other without. The UK is announcing it's February data on the 23rd March 2022.
With respect to the consumer the obvious hit is at the petrol pumps, but also in future energy prices and longer distance travel costs.
Regarding inflation there are two sides to that argument. The inflation reading will already have been felt in real terms in consumers pockets so the number will simply justify the pain being felt. However the upshot will be the necessary monetary policy required to control inflation which is generally an increase in central bank interest rates.
The bottom line is that we're all going to be spending less and tightening our belts.
Luckily working from home is a new norm so savings can be made there without the daily commute. The recent London Underground Train strikes will also be adding to this new way of living.
Outside of all the above the GBP/EUR rate finally pushed beyond the top of the recent range overnight. We are closely watching this as are most who are purchasing in Europe.
As ever we look forward to keeping you in the loop and look out for our next update.
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Today’s Economic Calendar
EUR: 10:00 Employment Rate
US: 13:30 Initial Jobless Claims
US: 15:00 Factory Orders
US: 15:00 FED Chair Jerome Powell Testifies
CAN: 16:30 and 20:30 Bank of Canada Tiff Macklem Speech