From Marc to Market:
Overview: What would it look like if Russia was on the verge of attacking Ukraine? Cyber-attacks. Check. Violation of the cease fire with the separatist regions. Check. Almost 2000 such violations were recorded on Saturday alone, according to the Organization for Security and Co-operation in Europe. Extending the military exercises with Belarus. Check. However, just as Asian markets were opening, Macron's proposal for a Biden-Putin summit were accepted in principle. Still, risk appetites remain muted. The MSCI Asia Pacific Index extended last week's 0.9% fall. The Stoxx 600 Index is nursing modest losses near midday after falling almost 1.9% last week. It has risen only one week so far this year. US futures are narrowly mixed though stock and bond markets are closed today. European bonds yields are 2-4 basis points firmer.
Perhaps, it is in the foreign exchange market where risk appetites appear the strongest. The dollar is offered against most currencies today, and the Japanese yen is a laggard. The Australian dollar and Scandis lead the advance. The Swiss franc is also one of the strongest majors. Among emerging market currencies, the central European currencies are the best performers today. The JP Morgan EM FX index is moving higher for the fifth session of the past six. Gold initially extended its gains and saw $1908 before returning to the $1890 area. April WTI is hovering around $90 a barrel. US natgas is up about 5.3% after losing about that much over the past two sessions. European natgas is up 1.7% after falling 2.8% before the weekend. Iron ore prices jumped 4.6% to recoup a chunk of last week's 11% slide. Copper is firmer for the first time in three sessions.
Asia Pacific
Japan's preliminary PMI underscores expectations that after rebounding in Q4 21, the world's third-largest economy is struggling at the start of 2022. New covid restrictions imposed in late January are taking a toll. The manufacturing activity slowed. The manufacturing PMI fell to 52.9 from 55.4. Services disappointed. The services PMI dropped to 42.7 from 47.6, and this kept the composite PMI well below the 50 boom/bust level at 44.6 from 49.9.Australia's flash PMI was better. The manufacturing reading rose to 57.6 from 55.1. The service PMI jumped to 56.4 from 46.6. The composite recovered to 55.9 from 46.7. The Reserve Bank of Australia meets on March 1. The market has a rate hike priced into the July, which the Governor Lowe has pushed against....
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