The week begins with Russia/Ukraine war continuing last weeks peace talks seemingly have gone nowhere and the war itself is taking on a siege mentality where the Russians encounter fierce resistance and don’t advance. This is likely to keep commodity prices elevated unless the talks actually lead to a cessation of hostilities.

The weekend attacks on Aramco installations by the Houthi rebels, although only temporarily disrupting production, does provide support for the oil price.

The world economy is suffering headwinds again with COVID raising its head in China which in turn is locking itself down

We also have two Central Bankers speaking on Monday : Lagarde from ECB and Powell of the FED and the market will look for clues as to timing of rate rises.

Data wise it’s a relatively quiet week however UK inflation figures will be watched for further evidence of rate rises. The Chancellor of the Exchequer will also lay out his spring statement which is likely to be more political . The FED members have become very bullish for rates and 6 more rises before year end cannot be ruled out in fact Bullard wants more rises “to get ahead of the curve” but the Europeans less so as the war is likely to slow economic activity but commodity prices are likely to contribute to inflation thus they are walking a tightrope at the moment.

The PMI’s in Europe are likely to be weaker as the world understands the significance of the Ukraine to various parts of industry not least the automotive sector.

The commodity markets are splitting into those that are Russia influenced and those that are not with the former remaining supported however the aforementioned Chinese slowdown is likely to affect demand. But this is a speculators market and thus volatility is likely to remain high.