1/A YEAR OF WAR U.S. President Joe Biden made an unannounced visit to Kyiv on Monday in a show of support ahead of the one-year anniversary of Russia's invasion, promising President Volodymyr Zelenskiy that Washington would stand with Ukraine as long as it takes. His visit follows a meeting of senior politicians and military leaders from around the globe in Germany over the weekend for a gathering dominated by Europe's biggest conflict since World War Two - as well as Sino-U.S. tensions.
The war is estimated to have cost thousands of lives and displaced millions. Sweeping sanctions have severed Russia from the fabric of global financial markets, reshaped commodity and energy flows, and pushed up inflation and funding pressures globally.
Moscow is ramping up its spring offensive, while Ukraine - armed with heavier and longer-range firepower from the West - gathers strength for a counter push.
2/DEBT AND DIPLOMACY Difficult international discussions over debt forgiveness for poor nations are going to get even trickier, when India hosts from Feb. 22-25 the first G20 finance and central bank chiefs meeting for the year. The world's largest bilateral creditor China is under fire for playing tough on its terms.
At the top of the agenda, besides cryptocurrency regulation, is the G20 Common Framework debt pact to allow the restructuring of low-income countries' debts after the pandemic.
India supports a push by the IMF, the World Bank and the United States for the Common Framework to include middle-income countries, though China has resisted. Progress is slow and while Chad, Ethiopia, Ghana and Zambia have all sought help, so far only Chad has reached a deal. 3/WAITING ON UEDA Although incoming Bank of Japan governor Kazuo Ueda is a dove, investors expect his tenure to end to yield curve controls. The $8-trillion question for the JGB market, though, is when? On the same day as the Ukraine anniversary - Feb. 24 - Ueda should offer clues on timing when he testifies with his two would-be deputies to the lower house. His Upper house testimony will be on the following Monday.
The consensus is Ueda will not rush to make changes, but
with the costs of maintaining YCC climbing, and market
distortions ever more pronounced, time is against him.
Elsewhere, the Reserve Bank of New Zealand sets policy on
Wednesday and the Bank of Korea on Thursday. Both are seen
taking dovish turns, with consumer prices starting to cool, and
South Korea at risk of its first recession since the 2020 onset
of the pandemic.
4/BUY, BUY, BUY
Fourth-quarter earnings season is nearly over and it has
been tepid so far. The days ahead will bring a look at how the
U.S. consumer has held up as some heavy-hitter retailers report
results.
Walmart, the world's largest retailer by sales, and home
improvement giant Home Depot report on Tuesday, while discount
store operator TJX Companies reports on Wednesday. Lowe's and
Best Buy will deliver results the following week.
Beyond the retail sector, semiconductor maker Nvidia and
pharma company Moderna also announce earnings. Fourth-quarter
earnings are expected to have dropped 2.8% from the year-ago
period, Refinitiv IBES data as of Feb 10 shows.
5/THE BUSINESS OF INFLATION
European stocks have risen in line with a recovery in
business sentiment and activity that signals the region may
escape recession. But markets are treading a fine line.
Any upswing in the new orders component of the upcoming
purchasing managers indexes - the keenly watched surveys of
business activity - could be bullish.
But if rosier commercial conditions bring with them rising price pressures, this may strengthen the European Central Bank's resolve to keep raising interest rates given stubbornly high inflation.
Yields on Germany's two-year bonds, which reflect interest-rate expectations, have hit their highest since 2008 this month. At the same time, equities are plugged into a view that higher borrowing costs will not derail companies' earnings prospects. These outlooks are not coherent. It will be difficult for both asset classes to be right.
<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^ Ukraine budget financing Distress signals Global business activity U.S. retail stocks versus the market Will Ueda end yield curve control? ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^> (Compiled by Amanda Cooper; Graphics by Sumanta Sen; Pasit Kongkunakornkul; Kripa Jayaram; Riddhima Talwani; editing by Barbara Lewis)
