Today's news headlines: 

‘Biden’s First Round of Russian Sanctions Lands With a Thud’. Instead of a sweeping package of sanctions designed to cut Russia off from the global economy, the US and allies took only tentative steps in response to the Kremlin’s actions over Ukraine. The relatively modest ‘first tranche’ of penalties—which included sanctions on a pair of Russian banks in addition to three individuals with close ties to the Kremlin—landed with little market reaction yesterday. White House officials were forced to defend the measured approach with questions raised over whether they’d prove strong enough to deter a full-scale invasion. (Bloomberg)

‘Omicron Ripping Through Cargo Ships May Exacerbate Shipping Woes’. A combination of tighter Chinese quarantine requirements for vessels and a surge in Omicron cases are causing concerns that supply chain disruption will continue longer than expected. China’s zero-Covid policy could prove more problematic at ports as more countries switch to a ‘living with the virus’ approach. According to project44 data, average shipment delays from China to the US West Coast increased 114% in 2021, while the route to Europe increased 172%. (Bloomberg)

Today

Risk appetite turned a little more positive overnight as markets digest the combined sanctions against Russia, with equity futures in the UK, EU, and US all moving higher. The geopolitical situation remains fluid, and we expect further volatility in the coming days.

Events

Australian Wage Price Index q/q: 0.7% vs 0.6% previously
New Zealand Official Cash Rate: 1.00% vs 0.75% previously
German GfK Consumer Climate: -8.1 vs -6.7 previously
UK Monetary Policy Report Hearings: 9:30AM
UK Monetary Policy Committee member Silvana Tenreyro speaks: 5:00PM

Interbank rates:

GBP/USD – 1.3609
GBP/EUR – 1.1999
EUR/USD – 1.1342
USD/CAD – 1.2736

The markets are moving. To speak to our team, please call +44 (0)20 3465 8200.