Financial markets will start next week with a reassessment of geopolitical risks, probably pricing in further aggravation of the situation in Ukraine and a new round of involvement of world powers in this conflict. This was facilitated by the message on Friday that the self-proclaimed republics of the DPR and LPR began the evacuation of civilians because of the threat of war, in fact, becoming a signal that the bet on de-escalation in one-two weeks completely failed. A geopolitical premium will probably start to appear again in risk assets, the demand for bonds will again increase, gold and oil will postpone overdue correction.Among next week’s economic reports, it is worth paying attention to the PMIs of Germany in the UK, which will appear on Monday. The British reports will be especially important, as the Bank of England has made it clear that it is preparing to raise interest rate further and, of course, that signs of a slack in expansion could frustrate its plans.On Wednesday, the RBNZ will hold a meeting on monetary policy and a rate increase of 25 bp is expected. The focus will be on the outlook for further rate hikes and the CB’s perception of inflation challenges.On Thursday, data on US jobless claims and the EIA inventory report are due out. On Friday, markets will assess the consumption potential of US households based on a report on orders for durable goods.
Source: Tickmill