And don't forget the country under attack, Ukraine, whose dollar bonds now price a default on debt. A firesale of Russian assets has accelerated and the rouble has slumped more than 7% against the dollar.Īll this of course will inflict pain on those doing the sanctioning too, above all, Europe where the euro has slipped to one-month lows. Volodymyr Zelensky made the remarks on Tuesday at a press conference with the UK's Boris Johnson. That's more than what's demanded of countries such as Iraq and Bolivia.īut it's less about the sanctions that have been announced and more about the ones that may now rain down, including cutting Moscow off from international payment systems and banning holding any of its bonds. Ukraine's president warned that a Russian invasion could spark a 'fully-fledged' European war. A country with a $640 billion warchest and debt ratios around 20% now carries a 5 percentage point yield premium on its dollar bonds relative to U.S. In the meantime, anyone who dismissed Western sanctions as toothless should glance at Russian asset prices. As a supporter of the European Union and a more independent European foreign policy, Macron is seen as an ally by the German ruling class in the implementation of the German-European great power. At the end of the war, several western European countries sought closer economic, social, and political ties to achieve economic growth and military security and to promote a lasting reconciliation between France and Germany. Will that hold true even as a situation described as the worst since the Cuban missile crisis unfolds? The EU represents one in a series of efforts to integrate Europe since World War II. It will also test the view that geopolitics are a buying opportunity. Other countries feared coalition of Spain and France would ruin the balance of power in Europe. And whether in that situation bonds will really prove the best safe-havens. War of Spanish Succession 1702 - 1713 Cause: Spanish ruler left the throne of Spai to Louis XIV's grandson. The obvious question that arises from the oil price effect is how much this aggravates inflation. So what next? Economic recession? Central banks forced to stay their hand with interest rate rises? Market bets on a 50 basis-point Federal Reserve rate rise for March are fading and at least one ECB policymaker has already urging the bank to maintain its stimulus programme until year-end at least.
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