Market WRAPS

Watch For:

Germany CPI, Labour Cost Index; UK Index of Production, Index of Services, Trade, Monthly GDP Estimates, BOE/Kantar Inflation Attitudes Survey, NIESR Monthly GDP Tracker; Italy Labour Cost Index; EU national leaders discuss Ukraine at Versailles summit; updates from Lanxess, EssilorLuxottica, Ceconomy, Daimler, Deutsche Bank, BNP Paribas, Fraport, DWS Group, Telia

Opening Call:

European shares are seen in retreat again Friday as the Ukraine state of war and fears over aggrandizement dominate global markets. In Asia, stocks tumbled beyond the board; the dollar held gains; oil edged up; and Treasury yields and gold eased lower.

Equities:

European and U.Southward. stock-index futures were lower again Friday, as doubt over the state of war in Ukraine and soaring aggrandizement keep to dampen sentiment.

Asian shares were deep in the red following losses on Wall Street, although all 3 U.S. indexes closed above their session lows Thursday.

Investors are worried most the global economic outlook, sapping their appetites for riskier assets in recent days.

"There's no optimism," said Michael Batnick, Managing director of Research at Ritholtz Wealth Direction. "If you expect at the investor sentiment survey, the spread betwixt bulls and bears remains pretty depression. In fact, if you're looking for a glimmer of hope, it's that no ane is bullish."

Read: European union Leaders Say More Sanctions Coming for Russia, Belarus

Forex:

The dollar held Thursday's gains in Asia equally risk-off sentiment dominated the local markets.

Banking company of America said the Ukraine state of war has come alongside lower overall G10 forex liquidity, just a closer look suggests information technology has been mostly a European theme. It said that overall, forex liquidity developments underscore the importance of a country's proximity to the conflict, and energy-import dependence.

"On the other hand, the response of the non-European G10 FX has been very measured. We note the yen has safeguarded its haven status, with USD/JPY remaining the almost liquidity dollar cantankerous, while we find notable the improvement in Australian dollar liquidity despite the market turmoil, which is entirely in line with the price activity."

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The euro should strengthen versus sterling as the European Central Bank is playing grab up with the Bank of England by signalling information technology will withdraw support at a faster stride, said TD Securities.

The procedure of ECB policy normalization and convergence with the BOE supports TD's recommendation to buy EUR/GBP. Notably the ECB raised its inflation forecast for 2024 to 1.ix%, which is near its 2% target, indicating that it is getting very close to reaching the conditions to raise interest rates. TD has targeted EUR/GBP rising to 0.8600 and has a finish loss of 0.8020.

The Fed:

The Federal Reserve volition likely dial dorsum its interest rate tightening this year as information technology juggles a rising inflation rate with the economic effects of the state of war, said David Rubenstein, co-founder and co-chairman of Carlyle Group.

Once inflation "gets in the system, it's very hard to go out," said Rubenstein. Before the war, the markets expected the Fed could tighten several times; at present the expectation is four or five times, he said.

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Thursday'due south inflation data sets the phase for a 25 basis points rate increment side by side week, said Banking concern of America.

"Aggrandizement breakevens declined across the curve and existent rates increased on the print, suggesting that the marketplace was setting up for a beat. The print endorses our view for a 25bps Fed charge per unit hike next week."

It said trading subsequently the data release as well pointed to "fading odds for a larger than 25bps hike next week."

Bonds:

The 10-year Treasury yield barbarous back below the 2% level in Asia.

The criterion lost some ground Thursday later on the dismal inflation data just bounced back to pierce 2% and striking its highest since February. sixteen. The yield'due south contempo decline has been attributed to a risk-off sentiment in global markets triggered past the war, but that mood changed this calendar week as investors focused on the expected rate increase by the Fed to fight aggrandizement.

"Loftier inflation has taken root," said Amherst Pierpont's Stephen Stanley, calculation a best-instance scenario would be core inflation easing to four% by the end of the year from vi.4% currently.

Free energy:

Oil futures gave upward early gains in Asia to trade well-nigh-flat, as Russian federation played down the severity of U.S. sanctions on its crude exports, said SSY Futures.

"Russia tried to downplay concerns that buyers were shunning its oil, with its foreign government minister proverb that information technology had plenty buyers for its oil and gas even as Western allies impose sanctions."

A stronger dollar was also a headwind for oil prices, SSY added.

ANZ said the sanctions on Russian crude risked a supply stupor in the market. "At pale is five million barrels/solar day of oil, which will be difficult to replace."

OPEC members are struggling to increase their oil output, given limited spare capacity with merely Republic of iraq and Saudi Arabia likely able to reasonably boost production, ANZ said.

Other News:

The recycling and reprocessing of batteries will be larger than the entire mining industry past about mid-century, said JB Straubel, founder and CEO of Nevada-based Redwood Materials, which collects waste matter battery materials and breaks them down to reprocess them for sale back into the supply concatenation.

The battery recycling industry is unlikely to take much impact on the traditional mining industry for years, though, Straubel said. He co-founded Tesla and was its longtime chief engineering science officer.

"We're in such a hyper growth phase in this industry that we need a lot of mining and all the recycling we can possibly do." Straubel said that automakers are starting to become involved in batteries "all the fashion back to the mine."

Metals:

Gold futures were slightly weaker, weighed by a stronger dollar, though increased run a risk disfavor in Asia may continue to support prices.

"Wall Street is going back into risk disfavor mode as Russian federation seems poised to continue to move forward with its attack on Ukraine," OANDA said.

Aluminum prices gained on continued concerns over supply disruptions. ANZ said the U.K. has appear sanctions on Russian individuals including Oleg Deripaska, who has a stake in Rusal, one of the world'southward top aluminum producers. The sanctions are raising risks of supply disruptions as companies shun their involvement with Russia, ANZ added.

Other News:

Rio Tinto's determination to sever all commercial relationships with Russian businesses should take straight implications for supply and offtake agreements with Rusal's Aughinish alumina smelter, Europe's largest alumina refinery, said RBC Capital Markets.

"If we assume that Rusal is unable to source bauxite from external sources, the refinery could lose upward to roughly 500,000 [metric] tons per annum [of] alumina which implies an bear on of roughly 265,000 tons per annum on aluminum production [circa 0.4% of total global production] in due course."

RBC noted there was dubiety over how much bauxite Rio Tinto provides to the operation and the timing of Rio Tinto's termination of its contracts. Bauxite stockpiles should enable full product to continue in the curt-term.

TODAY'S TOP HEADLINES

Biden to Call for Revoking Normal Trade Relations With Russian federation

WASHINGTON-President Biden on Friday is expected to denote that the U.S. will bring together major allies and the European Marriage in calling to revoke normal trade relations with Russian federation, co-ordinate to a person familiar with the decision.

The decision is in concert with the European union and Group of Seven nations to punish Russian federation over its invasion of Ukraine, the official said.

EU Leaders Say More than Sanctions Coming for Russian federation, Belarus

European Union leaders pledged to increment further the economic force per unit area on Russian federation and Belarus over the invasion of Ukraine post-obit a long elevation coming together outside Paris at Versailles, where divisions emerged over Ukraine's future links to the bloc.

In a statement published after the first day of the meeting ended in the early hours of Friday morning, the leaders said, "We are adamant to increment even further our force per unit area on Russia and Belarus."

Senate Passes $ane.5 Trillion Spending Bill That Includes Assist for Ukraine

WASHINGTON-The Senate passed a $1.v trillion package to fund the federal government for the electric current fiscal year, subsequently Democrats and Republicans resolved months of wrangling to quickly transport aid to Ukraine.

The mensurate was canonical 68-31 and at present heads to President Biden's desk-bound, ane day earlier a temporary funding measure was ready to elapse and set in motility a fractional government shutdown.

Economical Blacklist of Russia Marks New Blow for Globalization

WASHINGTON-The U.S.-led endeavor to expel Russian federation from international commerce marks another fracture in the gratuitous-trade vision that guided American policy for near 30 years, signaling a future where nations and companies shift away from trading with adversaries and focus more than on agreeing partners.

The actions taken by the U.South. and Western European allies since Russia invaded Ukraine have been swift and punishing-including banning or scaling back purchases of Russian oil, gas and coal to pressure level Russian President Vladimir Putin to call off his troops.

Europe to Weigh Emergency Measures to Limit Electricity Prices

The European Union should consider emergency measures in the coming weeks that could include temporary limits on electricity prices, European Commission President Ursula von der Leyen told leaders at an EU elevation in Versailles on Thursday.

The reference to the possible measures was contained in a slide deck Ms. von der Leyen used to discuss efforts to curb the Eu's reliance on Russian energy imports, which final year accounted for about 40% of its natural-gas consumption. The slides were posted to Ms. von der Leyen'southward Twitter account.

Ukraine War Pushes Biden Toward Venezuela, Iran and Saudi Arabia in Oil Hunt

The war in Ukraine has added urgency to the Biden assistants'south monthslong search for new oil supplies, every bit information technology seeks to contain surging energy prices through talks at home and diplomacy abroad with friends and foes alike.

The rush to fill up gaps from Russia'due south rapidly shrinking contribution to the global energy markets has led the White House to oil-rich nations in the Heart East, countries nether U.Southward. sanctions and private-sector oil giants coming together this calendar week in Houston. Only the quest has been complicated by several factors, including President Biden's vow to take a tougher line against Saudi Arabia over human-rights abuses, domestic political pressure and mail service-pandemic supply-concatenation disruptions.

Biden'due south Digital Dollar Could Rile Banks and Crypto

The Biden assistants's plan to study whether to launch a digital dollar may bring together some strange bedfellows: banks and crypto companies.

It isn't yet clear what the assistants's statement seeking to "explore a U.S. Central Bank Digital Currency" and its potential to piece of work "in a way that protects Americans' interests" might mean in applied terms. A CBDC could work in a number of dissimilar ways. But both traditional deposit-taking lenders and some upstart digital currency companies have had worries about what would happen if U.S. dollars become digitized in means that might enable them to move or exist stored independently or on a government-endemic network.

Can Investors and Key Bankers Dominion Out a Russia-Fueled Recession?

When non even a state of war deters key banks from tightening monetary policy, investors should know they are on perilous basis.

On Th, the European Fundamental Banking concern said it would scale downward its bond ownership faster than previously planned, opening the door to interest-charge per unit increases later on this year, even though its president, Christine Lagarde, admitted that "economical activity could be dampened significantly" past the war in Ukraine. The ECB cut its baseline project for eurozone economical growth in 2022 from 4.2% to 3.7%, with a more "severe" scenario bringing it downwardly to 2.iii%.

Nickel Market Freeze Extended to Sort Out Large Trading Loss Amid Ukraine State of war

London's nickel market will stay closed at least until next week, giving the London Metallic Commutation more time to resolve a crisis acquired past a huge loss-making trade originating in China.

The LME paused trading in nickel Tuesday, the first time it had suspended a market place since 1985, and canceled trades executed before the suspension. The substitution belatedly Thursday extended the freeze through the finish of the week.

Russia Ramps Upwardly Ukraine Attacks in Effort to Seize Strategically Key Port City

Moscow launched a fresh assault on the besieged southern Ukrainian city of Mariupol on Thursday, a day after one of its planes bombed a maternity hospital, illustrating how Russian federation is ramping up a vehement button to take strategic towns, at a high price for civilians.

Russian Foreign Minister Sergei Lavrov, afterward a meeting with his Ukrainian counterpart on Thursday, said the hospital was a legitimate target because it was held by "local radical militias," though Kremlin spokesman Dmitry Peskov told reporters "we don't take clear information" virtually the incident.

Communist china's Tech Giants Swoop on Concerns Over Consumption Slowdown, U.S. Regulations

Shares of China's largest tech companies dived Friday, extending a steep overnight selloff on Wall Street post-obit renewed concerns over China's slowing consumption and the potential run a risk of U.S. delistings.

JD.com took the hardest hit, with shares slumping as much equally xviii% past midday, after the east-commerce behemothic, in its latest earnings phone call belatedly Thursday, guided for macroeconomic pressures on China'south retail sector in early 2022 amongst rising raw-textile prices and recent local Covid-19 outbreaks.

Write to paul.larkins@dowjones.com

Expected Major Events for Friday

06:00/FIN: Jan Residuum of Payments

07:00/GER: 4Q Labour cost index

07:00/DEN: Jan External trade (provisional figures)

07:00/DEN: January Residue of payments (provisional figures)

07:00/TUR: Jan Balance of Payments

07:00/Great britain: Jan Index of Production

07:00/Great britain: Jan UK trade

07:00/UK: Jan Index of services

07:00/GER: February CPI

07:00/TUR: Jan Industrial Production Index

07:00/UK: Jan Monthly Gdp estimates

08:00/HUN: Jan Preliminary External Trade

08:00/SVK: January Foreign trade

08:00/CZE: Jan Industry, Construction

08:00/SPN: February CPI

09:00/ITA: 4Q Labour Price Index

09:30/United kingdom of great britain and northern ireland: Feb Bank of England/Kantar Inflation Attitudes Survey

x:00/CRO: Jan Strange Merchandise

x:00/MLT: Jan International Trade

11:00/POR: January International merchandise statistics

12:30/UK: Feb NIESR Monthly Gross domestic product Tracker

15:59/UKR: February CPI

15:59/UKR: Feb PPI

15:59/UKR: 4Q Gross domestic product

All times in GMT. Powered past Kantar Media and Dow Jones.

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This article is a text version of a Wall Street Journal newsletter published earlier today.

(Cease) Dow Jones Newswires

March xi, 2022 00:26 ET (05:26 GMT)

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