Ukraine Effects
Russia invaded Ukraine on several fronts early this morning.
As well as larger concerns about global gas markets (with consequences for fertiliser), early financial reports see:
- Brent crude oil at $101 a barrel
- upward pressure on grain, soya and metal markets
with concerns about the disruption to flows of commodities.
Ukraine is a major grain exporter. Russia is a major producer of commodities as well as energy (while gas has been noted it is the world’s second largest oil producer) and will be subject to increased sanctions. This escalates the challenges for economic recovery struggling with disrupted supply chains, cost pressures and tightening monetary policies.
“Basically, there’s no scenario priced into the markets because it’s impossible to discount fully. This is always the worst set of circumstances. Bad news is one thing. Bad news with practically unknown outcomes is another.” (Kyle Rodda, analyst at IG Markets, Bloomberg, 23rd February 2022)