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Russia Pipeline Shock, Mortgage Data, Black Box Found - What's Moving Markets

Economy Mar 23, 2022 06:42AM ET
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© Reuters.

By Geoffrey Smith 

Investing.com -- Oil prices rise as Russia chokes off a Kazakh oil pipeline claiming it needs to repair storm damage, while U.S. inventories appear to have fallen again last week. The chorus of voices at the Fed calling for actively restrictive policy grows louder. Inflation in the U.K. hits a new 30-year high as the government tries to tackle a cost of living crisis. U.S. stocks are set for a breather at the opening, and China finds the black box from the Boeing (NYSE:BA) 737 that crashed earlier this week. Here's what you need to know in financial markets on Wednesday, 23rd March.

1. Russia chokes off Kazakh oil pipeline as Europe ramps up debate on sanctions 

Oil prices rose again as Europe’s debate over sanctions on Russian energy exports ratcheted up a day ahead of a crucial summit meeting.

Italian Prime Minister Mario Draghi told lawmakers that Russian President Vladimir Putin is not interested in serious peace talks, a conspicuously hawkish tone from a country that is highly dependent on Russian oil and gas. German Chancellor Olaf Scholz, by contrast, reaffirmed his opposition to an immediate embargo, citing the economic costs.

Russia has unilaterally tightened the global oil market overnight by closing the Caspian Pipeline Consortium’s export terminal on the Black Sea, claiming that storm damage needs to be repaired. The 700,000 barrel-a-day link largely carries oil from Kazakhstan to world markets.  

U.S. crude prices rose 1.8% to $111.25 a barrel, while Brent rose 2.1% to $117.90 a barrel, ahead of U.S. government data on inventories at 10:30 AM ET. According to the API industry group, crude stockpiles fell by a surprisingly large 4.3 million barrels last week.

2. Dovish Daly adds to calls for faster rate hikes; Mortgage data, new home sales due 

San Francisco Federal Reserve President Mary Daly added her voice to those calling for the Fed to raise interest rates above what is seen as the neutral rate in order to bring inflation down.  

Daly’s comments follow similar ones from Chair Jerome Powell, governor Chris Waller and St. Louis’ James Bulllard this week, but are notable given that she has been at the dovish end of the spectrum as regards tightening policy in recent months. As such, her comments suggest that a clear majority may be in favor of a 50 basis point rate hike at the Fed’s next meeting.

U.S. bond yields have for now stopped their relentless rise, with the 10-year Treasury yield falling by 2 basis points overnight to 2.36%. Their rise will put a sharp focus on weekly data for mortgage applications and rates at 7 AM ET. New home sales data for February are also due later.

3. Stocks set to take a breather at opening 

U.S. stock markets are set to open a little lower on profit-taking after Tuesday’s solid gains.

By 6:20 AM ET, Dow Jones futures were down 83 points, or 0.2%, while S&P 500 futures were down 0.3% and Nasdaq 100 futures were down 0.4%. All three indices had risen on Tuesday, having digested the apparent hawkish shift in Fed policy. The Nasdaq Composite rose 2.0%, taking its gains to 9% over the last week.

Stocks likely to be in focus later include GameStop (NYSE:GME), after some more buying by its chairman Ryan Cohen, as well as Cintas (NASDAQ:CTAS) and General Mills (NYSE:GIS), which report earnings. Walt Disney (NYSE:DIS) stock may also be volatile as employees in Florida step up protests against the state’s new bill on LGBTQ issues, while BuzzFeed (NASDAQ:BZFD) stock is still ticking up in the wake of its decision to close its loss-making newsdesk.

4. U.K. inflation hits 30-year high as cost of living crisis worsens

U.K. inflation hit a 30-year high of 6.2% in February, with continued rapid increases in producer prices stoking fears that the peak in consumer inflation may not come for another eight months.

The figures create a tense backdrop for the government’s spring budget statement, which is expected to contain some substantial giveaways on fuel taxes, following the lead of France, Italy and others. It isn’t clear whether the government will stick to its prior plans to raise national insurance contributions in order to close a budget deficit which has narrowed more sharply than expected in th last couple of months.

Bank of England Governor Andrew Bailey is also scheduled to speak at 8 AM ET (as is Bundesbank head Joachim Nagel, coincidentally)

5. China finds 'Black Box' of crashed Boeing

Chinese officials have recovered one of the flight recorders from the Boeing 737-800 that crashed during an internal flight on Monday, according to local media reports.

The discovery should allow for a relatively quick clarification on the cause of the crash.

Elsewhere in China, internet giant Tencent (OTC:TCEHY) reported growth of only 8% in revenue in the last quarter, the slowest on record.

The country’s Covid-19 outbreaks, meanwhile, show no sign of slowing yet, with emergency disease control teams dispatched to 28 of the country’s 31 regions.

Russia Pipeline Shock, Mortgage Data, Black Box Found - What's Moving Markets
 

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Comments (15)
HARI BABU
HARI BABU Mar 23, 2022 1:38PM ET
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Russians would not invade Ukrain if JB succeeded to drop oil prices. it is JB who is funding this war. he is encouraging Putin with higher oil prices. JB is not doing anything to curb oil prices in fact he want oil to rise so russians keep on spraying fire. next JB mission is to hold ukrainians in poverty and make them struggle for food so that they participate in insurgency against Russians for some bucks.
tamer Samir
tamer Samir Mar 23, 2022 10:02AM ET
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Russia will force Europe to start paying for gas supplies in rubles, President Vladimir Putin said Wednesday in televised remarks. “I have decided to implement a set of measures to transfer payments for our gas supplies to unfriendly countries into Russian rubles,” Putin said, ordering the changes to be implemented within a week.
James Johannsen
James Johannsen Mar 23, 2022 10:02AM ET
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better get out of the dollar quick
Tre Hsi
Tre Hsi Mar 23, 2022 10:02AM ET
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“I have decided to implement a set of measures to transfer payments for our gas supplies to unfriendly countries into Russian rubles,”  -- the little czar is so detached from reality he actually thinks he is in a position to order Europe to pay in rubles
craig sochia
craig sochia Mar 23, 2022 10:02AM ET
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Miss 09
Marco cuevas
Marco cuevas Mar 23, 2022 9:30AM ET
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Open the racket greatest fraud in the world US stock.exchange.
perplexed76 .
perplexed76 . Mar 23, 2022 9:29AM ET
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houthi bandits attacked Saudi arabia oil structure, kazakh pipeline damage. Concidence.
Marec Huber
Marec Huber Mar 23, 2022 9:25AM ET
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You'd think from the destruction and the amount of ***of innocent civilians, so far in Ukraine,NATO had enough reason to maximize sanctions against Putin,not a little at a time like they've been doing !?The incompetence of determining strategy and logistics ?is much like giving leadership to chronic disruptive uneducated Elementaryschool kids to manage its citizens needs !
ottin nerner
ottin nerner Mar 23, 2022 9:25AM ET
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we've already bomb them with our most powerful sanctions, their Central Bank and SWIFT.... the only sanctions that we can give them is banning import Siberian husky dog and Russian blue cat....
Chad Richer Than You
Chad Richer Than You Mar 23, 2022 9:25AM ET
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Every dinglebat analyst on this platform is 50% liquid and 50% shorts and wanna keep everybody outside the market suggesting the end of days while hoping to score the highest return possible on his recession puts. G T F O here!
Jay Rhyder
Jay Rhyder Mar 23, 2022 9:02AM ET
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EU needs new connections for their oil and gas, or someone use the force Vladimir Putin out of office. under Putin's leadership, Russia cannot be trusted to do business with. this is not the first war that he started by attacking an innocent country/continent. and also notice how he also always attacks countries where governments that are smaller and some cases defenseless.... he's a coward who likes to bully other nations.
Chad Richer Than You
Chad Richer Than You Mar 23, 2022 9:02AM ET
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focus on investments
James Johannsen
James Johannsen Mar 23, 2022 9:02AM ET
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you're confusing Russia with the US
Alina Abaev
Alina Abaev Mar 23, 2022 8:37AM ET
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gab nea
gab nea Mar 23, 2022 8:36AM ET
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storm damage? wink wink.
First Last
First Last Mar 23, 2022 8:36AM ET
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Yup.  Putin making bs up to manipulate oil prices.
Tre Hsi
Tre Hsi Mar 23, 2022 8:36AM ET
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did Putin tell his chinese bff he was going to do this?  because I am pretty sure the chinese are already unhappy about the high oil and commodity prices they have to pay these days.....
Shep De
Shep De Mar 23, 2022 7:51AM ET
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I don't know about other stuff but because of weather, to day it'll take 2-3 months to repair Caspian pipeline seems more untrue than true, esp. coming from Russia.I think, Russia just said that to further try & make EU think dependent on oil.But, now's the time to not let Russia psychology control us, pipeline an example, got to just cut off oil from Putib. it's like sleeping with the enemy. Don't do it, paranoia and then reality you were robbed, or, worse, is bed-ly result
 
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