Nobody knows where the conflict between Russia and Ukraine is taking us. The most visible economic consequence of the current conflict is the surge in commodities. ALL commodities. Overnight, they took an even more bullish turn because the West is discussing a boycott of Russian oil. There was even an 18% spike in the price of a barrel after Bloomberg revealed that the White House was considering imposing a boycott, even if its European allies did not.

Antony Blinken confirmed earlier in the weekend that he was discussing an embargo on Russian fossil fuels with his European counterparts. Cutting off Russia's main source of cash would further increase the pressure on the Kremlin, but would also have incredibly complex consequences for European economies. At the same time, two large Libyan oil fields have stopped production after an armed attack. 

The price of Brent crude oil has risen to around USD 130 per barrel, which brings it within reach of its all-time high of around USD 150 in July 2008. This time monetary policies will not be of much help since they were already struggling to correct previous excesses. The Fed is due to release its latest decision next week, on March 16. By then it’ll have seen February inflation figures in the United States, which will be published on Thursday.

Volatility is still high and stock markets are still in panic mode, even though the announcement of new high-level talks this week between Russian and Ukrainian leaders in Ankara this week sparked a little bit of optimism. This has caused a rebound in European markets. Wall Street index were all in the red to start the day.

 

Economic highlights of the day:

Only German factory orders for January are likely to attract investors' attention today. This morning, China released its import and export figures for the past month.

The dollar is down to EUR 0.9172, while the ounce is trading at $1976. Oil surged to USD 120.96 per barrel for Brent and USD 117.35 for WTI. The yield on US debt falls back to 1.69% on 10 years and the Bund returns to negative at -0.08%. One Bitcoin is worth USD 38,970.

 

On markets :

* Netflix- The streaming video giant announced Sunday a suspension of its services in Russia following Moscow's invasion of Ukraine.

* American Express announced on Sunday that it is suspending all operations in Russia and Belarus due to U.S. and international sanctions after the invasion of Ukraine.

* Visa, Mastercard - The two U.S. payment card specialists announced on Saturday they would suspend operations in Russia after the invasion of Ukraine, prompting Russian banks to migrate to the Chinese UnionPay payment card system.

* Coinbase announced Monday that users from internationally sanctioned countries would no longer be able to open accounts on its cryptocurrency exchange platform. The stock is down 3.2% in pre-market trading.

* Uber is up 4.7% in premarket trading after the company raised its first-quarter adjusted profit forecast to $130-150 million from $100-130 million.

* Microsoft on Monday opened its fourth data center in India, a fast-growing market where cloud services are expected to reach a total of $10.8 billion by 2025, according to research firm IDC.

* Oasis Petroleum, Whiting Petroleum - The two U.S. shale oil and gas producers, valued together on the stock market at about $6.07 billion,  are close to reaching a merger agreement that could be announced this week, a source close to the matter said Sunday. Whiting Petroleum is up 7.9% in pre-market trading and Oasis Petroleum 6.2%.

* Bed Bath & Beyond - Ryan Cohen, chairman of Gamestop, announced Sunday that he owns nearly 10% of Bed Bath & Beyond and asked the housewares distributor to consider strategic alternatives, including a sale of the company.

 

Analyst recommendations:

BAE Systems: Berenberg remains Buy with a price target raised from GBp 600 to GBp 850.

Citigroup: Jefferies downgrades to hold from buy. PT up 6% to $60.

First Horizon Corp: Jefferies downgrades to hold from buy. PT up 5.5% to $25.

Glencore: AlphaValue upgrades to Accumulate from Hold with a target of GBp 544.

ITV: Goldman Sachs upgrades to neutral from sell. PT up 25% to 94 pence.

Mondi: Jefferies remains Buy with a target reduced from GBp 2200 to GBp 1670.

Mosaic: HSBC downgrades to hold from buy. PT down 4.7% to $57.

NextEra Energy: KeyBanc Capital Markets upgrades to overweight from sector weight. PT up 8.5% to $87.

Philip Morris: J.P. Morgan downgrades to neutral from overweight. PT up 10% to $110.

Trainline: Berenberg remains Buy with a price target reduced from GBp 440 to GBp 260.

United States Steel: Morgan Stanley upgrades to equal-weight from underweight. PT down 1.3% to $31.