Daily update
Daily update
- In Russia, the mercenary Wagner group’s march on Moscow, and subsequent retreat from the march on Moscow has occupied news headlines. Financial markets have bordered on indifference. Political and media attention may be diverted from other issues like the cost of living crisis, but this is not dramatic enough to concern investors. There are two obvious ways markets might be made to care.
- If Russian domestic instability affects energy supplies (and thus energy prices), markets would respond. Alternatively, if a weakened Russian President Putin were to attempt a show of strength in the war in Ukraine, this may broaden and strengthen western sanctions against companies doing business with Russia. Markets are not pricing in either scenario at the moment.
- Weekend data from China emphasized how consumption there has differed from developed economy consumption, as COVID restrictions have eased. For example, internal tourist trips have risen compared to pre-pandemic levels, but consumers are spending less money on each trip—a sharp contrast to the reckless spending of developed economy consumers.
- We have the German ifo and the US Dallas Fed surveys of business sentiment. There is not much to expect from either. We also hear from ECB President Lagarde. There is also not much to expect from that.
