 Hi everyone, hope you're doing well thought I would jump on because I've had quite a few messages this morning because WTI crude had briefly hit a high of 116 and a half dollars a barrel the highest level since 2008 had lots of questions I thought I'd jump on just surmise the actual situation here because it's not just oil that's moving Commodities are moving across the board and this does have of course implications as well for knock on a subsequent effects for the Fed the potential for a future recession and So on so lots for us to quickly run through. So let me get you up to speed So here we are at at the moment with the latest map of activity From a military perspective in Ukraine Russia claims to have captured the port city of Kursan is the latest in southern Ukraine You can see down here Despite the stalling that's being seen at the moment on Kiev people have talked about that at the moment Possible fuel and and food shortages the miscalculation of the types of resistance in the capital city Most strategists that I've been reading are of the opinion though That it's somewhat inevitable that they'll regroup and make further in ways into the capital city The main thing that we're looking out for today on this perspective Really is that Ukraine have said that it'll take part in a second round of talks with Moscow today There's no set time that I'm aware of at the moment So of course that's something to look out for an eventual outcome of that probably hoax will be managed in a sense of Kind of like the first round of talks and terms of market implications in an intraday environment It could be that if they are open to continuing dialogue Then that's enough for markets to catch a little bit of reprieve and actually you might see some mild or moderate Relief movement so upside inequities perhaps That's the way to interpret that because we're not looking for a silver bullet and some type of peace agreement to happen This quickly if they walk away from the table or the meeting in itself does not happen We might just continue to revert back to trend of what we've been seeing at the moment The other thing as well is that US Secretary of State Anthony Blinken will travel to Eastern Europe beginning from today So the US continues its efforts to reassure Some of the neighboring countries around Russia who are involved with NATO Just to align all of the the members within that team so to speak The other things that are happening You should be aware of the US are going to postpone what's called the Minuteman 3 intercontinental Ballistic missile tests they did have that planned for this week and the rationale behind that is they just don't want to create an unnecessary Relivated level of friction that might well cause things to materially worse at this point in time And it is worth noting though. I'll know that Putin has talked about Arming of of kind of nuclear readiness all the state of their activities one thing I was listening to a strategist last night that I think it's a very valid point It is worth noting that Russia does use Historically, it's nuclear arms as what we kind of refer to a saber rattling Which is making kind of a lot of noise It's not anything particularly new they have made that type of commentary before It's sensational as it might sound when you read it in the in mainstream press When they test missiles when they test new bombs They even put it on their billboards Showing it striking Florida in the US. So just to give you a bit of context That's not new and again So it's kind of the threatening language But nonetheless the US does not want this situation to escalate In other news just having a quick run through other things So this is it here about what I've just described with the missile test the other thing that we've had is this and Russia's rating has been cut to junk by Moody's Fitch also slash Russia's credit rating six levels to junk and the MSCI is Eliminating Russian equities from its emerging market Index so I did also share on my Twitter last night an interesting fact sheet from Reuters that they had prepared of fund manager's exposure to Russian markets and Definitely worth being aware of that because exposure goes into the the tune of tens of billions of US dollars across the different funds The other thing then here is looking at then just an impact that the sanctions and the the swift move all the other things that we've seen imparted from the West on Russia the Dow Jones Russian GR index which does track Russian or London traded Russian companies has plunged 98% as you saw from that headline in just two weeks depository receipts for spur bank Have slumped 99% this week and Gazprom are down 98% These are just absolutely insane moves But a context here spur bank is the country's second largest bank and they got cut off from swift They were specifically targeted Hit by the full blocking of sanctions from the US and the state controls Just over 90% of VTB and around 50% of spur bank and what we have heard earlier this week on Tuesday Russia actually came out and said that they were going to deploy around 10 billion US dollars in order Coming from their sovereign wealth fund in order to prop up and buy equities at this point in time The Bank of Russia is not going to resume their stock market. It's being closed all week And it's unlikely to change anytime soon this week They're going to make a separate announcement on their trading schedule on Monday. It's the latest what we heard last night the other thing of course what's happening as I mentioned is oil prices and WTI crude just smashed through 1 15 when I've turned on my screens this morning We've peaked up at 1 16 57 in WTI We've pulled back a little bit to 1 13 and a half, but as you can tell from these price quotes, which is very Fluid price movement at this moment in time and as you can see here It's the highest we've traded since 2008 as the Russian invasion upends the market to have a little bit of context This is what we're looking at and of course this comes a day after we had the OPEC meeting As I was kind of talking about in the briefing on Monday. I wasn't really expecting too much from that I thought that they would kind of steer away from the political Entanglements that would come with moving of their pre-determined plan Which is the return of supply and a much more kind of graduated 400,000 pounds per day of which they stuck to and my understanding is actually it was a super quick meeting I think it was like 13 minutes. They just came out decision We're not gonna budge from that that standpoint at this point in time there's a lot of political layers that come with OPEC and I doubt the Saudis really want to Do anything to get involved with this Russian situation at this point in time So without that kind of interjection with them to add further supply with even despite prices rising Probably another factor, but what's been really happening is this whole potential repositioning of this supply shock that could come by way of Disruption to supplies coming out of Russia, of course now one of the things I wanted to mention is that it's not definitely not just oil Wheat prices as we know Ukraine Russia ship more than a quarter of the world's export of wheat There are many countries particularly fairly close in the region like Egypt for example, which are very almost entirely dependent on wheat supply coming from That particular area which are going to really fill the pain of some of these latest price Movements, but wheat has also searched to a similar type of level highest level since 2008 now soaring past 11 bucks a bushel to the highest in 14 years Essentially problems with fighting has closed ports its halted transport and it's severely hampering logistics at the moment Which is causing the the move higher in price the other thing to be aware of here as well is that the war also threatens playing Into the planting season for this year in Ukraine of course because while everything is going on That's unlikely to happen From an agricultural perspective so seeds fertilizer these other key components of that process are going to be in short supply and it risk is Growing that shortages are likely to spill over to the next season and potentially even longer So they're the reason for the really sharp incline in these soft Agricultural goods particularly sensitive and wheat and corn and so forth is not just because of now because the implications It will have on the future as well Not only this other commodity prices as well as surging at the moment. So as you can see here Metals extend scorching rally zinc topping 4,000 on Russia. Here's a look at the black line Which is elemy zinc here at the bottom, then you've got elemy aluminium and nickel So zinc is at its highest levels since 2007 Aluminium is trading at a record high level at this moment in time So it's just a lot going on at the moment and what this of course leads to Which is something my colleague Eddie was talking about some of his LinkedIn posts If you don't follow him on LinkedIn, Eddie Donmez from amplifier, you definitely should he puts out some great intel But he was talking about in a post yesterday about this idea of stagflation So we've just talked about in the moment all of these energy prices but more broadly commodity prices surging and it comes at a point of course where on an annualized basis in the us inflation is at Seven and a half percent. So it's incredibly high sort of four decade high at the moment But it's likely to go even higher and this comes at a point where the fed are Committing to hiking rates. So Jerome Powell spoke yesterday. He delivered his semiannual testimony to the house He's going to do it to the senate today, which is a recycle of those comments But he basically said and let's just check out the the pricing of a fed rate hike going forward He said the central bank in the us needs to proceed carefully Emphasizing the need to be nimble, but he did say he's inclined to back a quarter point hike from the fed So this idea of 50 basis points We were talking about just a few weeks ago is dead as a dodo now That doesn't exist market pricing now is either they hold rates Forget any hike, which is a 2.2 percent very minority Market positioning for that the overwhelming majority. I mean the guy said it himself yesterday He wants to back a quarter hike. So I'm not sure what these people are pricing in here Perhaps a continue escalation Russian situation which changes the dynamic But even then with inflation surging the fed are left with very little other options at this point so Yeah, 25 is on the cards the fed are still going to hike And it's likely to be then a series of rate increases and why I say that is because that's what Powell has said Right, so we're still talking about multiple rate hikes to come in the future Now the problem of course here becomes These this chart here. So this is just looking at a study of real oil price percentage deviation from trend and subsequent impact then on timings of recessions and so The hot idea here is that you're hiking into a market Which is going to be feeling the pains consumer confidence in america despite other elements of the economy Proving robust What we've seen in other areas particularly like we're likely to see in the jobs data that we can because omokron is declining So jobs markets are picking up and so forth a lot of the factors are supporting On one way for hiking but in another way consumers are feeling the pain of inflation They're becoming less confident and these prices are going further north at this point in time So here whenever oil basically has got around these levels It's tend to have been a somewhat trigger point for then a subsequent recession to follow Thereafter and this is what the markets are trying to tackle and manage at this point in time final things I just wanted to mention was this Something to be aware of is that china's consumer and retail shares were actually up overnight and quite significant U-turn in what otherwise has been a A kind of policy enforced over the last two two and a half years since the onset of co vid Which is they're going to weigh an exit from their strict zero tolerance co vid policy now This isn't going to happen immediately. This was according to sources in the wall street journal overnight They were talking about beijing unlikely to ease controls until next spring However, opening measures could arrive in select cities as a testing measure earlier and so That's that's definitely I'd say action that's being taken Given some of the pressures that are being also felt in the chinese economy from a growth perspective as we know Which has been decelerating of late The rest of today just while we're here on the call We've got the various service final PMI numbers again as I said, these are final readings So nothing to get too excited about ECB minutes. They're going to be very stale I would say given the fact that the geopolitical situation has really dominated proceedings And that's come in the interim period between when that meeting was conducted and where we're at now You've then got weekly jobless claims this afternoon. US factory orders ism services PMI Coming out as well as well as powell's going to recycle that speech this time to the Senate banking committee But look that that's it from me. Just thought I'd do a quick update Don't forget we'll drop the latest podcast if you just search for amplify me market maker and spotify Google apple so forth You'll be able to find the latest conversation between myself and peers going to record that later on this afternoon All right guys, hope that helps take care and I'll see you for the next session. Cheers