Hello and welcome to our ongoing coverage of the global economy, financial markets, eurozone and business.
The week started on a calmer note with news that US President Joe Biden and his Russian counterpart Vladimir Putin have agreed to meet to discuss the Ukraine crisis.
French President Emmanuel Macron has invited Putin and Biden to attend a summit aimed at defusing the Ukraine crisis, and the leaders have agreed in principle, Macron’s office said, amid fresh US warnings that war is over. imminent.
The Russian ruble fell to a one-week low but has since recovered to trade up 1% against the dollar. It is now at 76.5 after hitting 77.69 early in the session.
As tensions on the Ukraine-Russia border escalated over the weekend, European markets are expected to rise slightly at the open. US markets are closed for President’s Day.
Brent crude, the global benchmark for Russia’s top export (oil), is down a fraction at $93.45 a barrel. Gold – considered a safe-haven investment in difficult times – fell 0.5% to $1,888.54 an ounce after hitting an eight-month high of $1,891.33 an ounce.
However, markets remain jittery and Asian stocks are mostly down today, with Japan’s Nikkei losing 0.78% and Hong Kong’s Hang Seng 0.83%.
Last week Britain’s FTSE 100 index had its worst week since late November, when the discovery of the Omicron Covid-19 variant shook markets. The blue chips index lost 1.9% after a big drop last Monday.
In JapanA key parliamentary committee has approved the government’s record spending plan of 107.6 trillion yen (£690,000) for the next financial year, paving the way for the full passage of the budget by the legislature next month.
The economic highlights are Quick estimates for Markit’s popular business surveys for February, published this morning for the euro zone and the United Kingdom.
Michael Hewson, chief market analyst at CMC Markets UK, weighed in on the matter.
The outlook for the French and German economy remains uncertain, although after a weak December, the German economy experienced a modest rebound in January.
In the UK, December saw a sharp decline in service sector activity, to 53.6 from 58.5 in November, a development which saw a slight recovery in January, despite the Plan B restrictions introduced by the British government in the middle of the month. to concerns about the Omicron variant.
Restrictions on the hospitality sector clearly hit pubs and restaurants, as well as some retail outlets, but we still saw a recovery to 54.1. With the gradual lifting of restrictions in mid-January, we could see a further rebound to 55.5, although this is likely to be tempered by caution on the rising cost of living.
Meanwhile, manufacturing activity was flat, slipping slightly to 57.3, but retail price inflation remained at record highs, a trend that is expected to continue. On the positive side, new orders and employment also rose, with hopes that this will continue in the first quarter.
- 8:15 GMT: France Markit manufacturing, services and composites PMI flash for February
- 8:30 GMT: Germany Markit flash PMI for February
- 9am GMT: Markit eurozone flash PMI for February
- 09:30 GMT: UK Markit flash PMI for February (composite forecast: 55)
- 3:15 p.m. Hearing of the Treasury select committee on the future of financial services