US president Joe Biden and German chancellor Olaf Scholz presented a united front against a Russian threat to invade Ukraine, as a White House meeting exposed differences over the fate of the Nord Stream 2 gas pipeline. The two leaders stood at lecterns side by side in the East Room of the White House, issuing opening remarks in which Biden deemed the US-Germany relationship a “close” friendship and a “reliable” partnership. Biden told reporters yesterday that if Moscow invaded, the pipeline linking Russia with Germany would not become operational. His comments represented a hardening of Washington’s stance on the project, which has been built but is not yet pumping gas and has emerged as a sticking point in the transatlantic debate over which sanctions to impose on Moscow in the event of an invasion. Both Scholz and Biden addressed Russia’s looming threat to Ukraine during Monday’s press conference, with Biden ultimately telling Americans it would be “wise” to leave Ukraine. Scholz’s visit comes as Biden administration officials warn that Russia has assembled 70 percent of the troops needed to launch a full-scale invasion of Ukraine and as Biden works to present a united NATO response to the crisis.
Boris Johnson has insisted that Britain will “not flinch” and will continue to offer “unconditional and immovable” support to NATO, amid continued fears that Russia could be preparing to invade Ukraine. Johnson has reportedly warned Russian president Vladimir Putin that invading Ukraine would backfire and only serve to strengthen NATO. The PM said sanctions and other measures will be ready in the event of a Russian attack on Ukraine, and his government will ask parliament for sanctions on Russian individuals and companies. His comments come as officials in the United States say an attack by Russia on Ukraine could occur within days or weeks. Defence secretary, Ben Wallace, also warned that if Russia makes the “foolish mistake” of invading Ukraine it will face severe sanctions. With Russia having amassed an estimated 130,000 trips near its border with Ukraine, Foreign Secretary Liz Truss is to head to Moscow for talks as diplomatic attempts to avert a war continue. Meanwhile, the UK is also preparing to reinforce the British-led NATO battlegroup in Estonia and considering deploying Royal Air Force fighters and Royal Navy warships to the region.
Sterling is stronger against euro and weaker against the dollar this morning. Boris Johnson was under mounting pressure on Monday to offer a full apology to Sir Keir Starmer, after the Prime Minister’s “Trump-style” rhetoric was linked to a mob surrounding the Labour leader at Westminster. Starmer had to be bundled into a police car after a crowd, some of whom were screaming “paedophile”, surrounded the Labour leader and the shadow foreign secretary, David Lammy. Johnson insisted on Monday that chancellor Rishi Sunak was “absolutely” loyal to his leadership, as ministers said a “fragile truce” had been brokered with Tory MPs following an overhaul of No. 10. British households will be offered financial incentives to limit their electricity use during periods of peak demand in a two-month pilot scheme to test how consumers can help balance the grid and potentially reduce the need for new power stations. UK consumer spending growth slowed at the start of the year as rising living costs and restrictions imposed to contain the high number of coronavirus infections limited social activity, according to bank transaction data.
Euro is weaker than most major currencies in the early morning trade. Borrowing costs for Europe’s southern flank have risen sharply, with investors now demanding a yield premium of 160 basis points to hold 10-year Italian bonds relative to safer German equivalents. French officials said Vladimir Putin had moved towards de-escalating the Ukraine crisis by promising not to undertake any new “military initiatives” and agreeing to withdraw thousands of Russian troops from Belarus after the completion of planned exercises. Foreign Minister Annalena Baerbock promised unequivocal German support for Ukraine on a visit to Kyiv on Monday as the two sides sought to narrow differences on Ukraine’s request for weapons to prepare for a possible attack from Russia. Gorban’ serves in Novi Yarylovychi, a sleepy town of about 500 people next to the biggest crossing point on the Ukrainian-Belarusian frontier. Normally quiet, it is now the focal point for mounting fears of a new war in Europe. The Swedish government said it has decided to lift entry restrictions for foreign nationals travelling to Sweden from Nordic countries and the rest of the European Union and European Economic Area from Wednesday.
The dollar is well bid against most major currencies overnight. The United States and Japan on Monday announced a deal to remove Trump-era tariffs from about 1.25 million metric tons of Japanese steel imports annually after Washington granted similar access for European Union steelmakers last year. The Republican party has been wracked by new internal tensions after it officially defended the January 6 rioters that assaulted Congress as proponents of “legitimate political discourse” who were being unfairly targeted. The statement by the Republican National Committee triggered a sharp backlash from some party lawmakers and top former officials, highlighting the rift that still exists over Donald Trump’s role as the GOP tries to regain control of Congress in the November midterm elections. A group of 33 Republican senators warned US President Joe Biden that they would work to thwart implementation of any new Iran nuclear agreement if his government did not allow Congress to review and vote on its terms. Meanwhile, several States move to end some mask mandates.
Ballinger & CO. Morning Report- 08th February 2022
GBP>EUR – 1.1851
GBP>USD – 1.3532
EUR>USD – 1.1418
GBP>CAD – 1.7203
GBP>AUD – 1.9020
GBP>SEK – 12.378
GBP>AED – 4.9718
GBP>HKD – 10.550
GBP>ZAR – 20.941
GBP>CHF – 1.2497
· 8:00 a.m.: Sweden Dec. industrial orders; household consumption
· 8:00 a.m.: Denmark Dec. industrial production
· 8:45 a.m.: France Dec. trade balance
· 9:00 a.m.: Spain Dec. industrial output
· 10:00 a.m.: Italy Dec. retail sales
· 10:30 a.m.: Spain sells bills
· 11:30 a.m.: Germany sells bonds
· 12:00 p.m.: Norway energy ministry updates on petroleum activity
· 6:00 p.m.: ECB’s Villeroy speaks
· EIA Short-Term Energy Outlook
· Iran nuclear talks resume in Vienna
· Earnings include BP, Willis Towers, CNH Industrial, Ocado, Yara International, Qiagen, Demant, Telekom Austria, Nvent Electric, Tui, AMS-Osram