Joe Biden launched a salvo of sanctions against Russia as he accused Putin of beginning an “invasion” of Ukraine and warned that Washington was prepared to take further action if Moscow escalates its assault on Ukrainian territory. Speaking from the White House, Biden announced measures targeting two of Russia’s largest financial institutions, VEB and Promsvyazbank, which support economic development and defence projects, as well as the country’s elites and their family members. Sanctions would also be aimed at Russia’s sovereign debt – “we’ve cut off Russia’s government from western financing,” Biden said. “It can no longer raise money from the west and cannot trade in its new debt on our markets or European markets either.” The US president warned that Washington was prepared to go further if Russia escalated its hostilities. While Biden said he was taking measures to ensure the sanctions would not hit a US economy suffering from high inflation, he acknowledged that “defending freedom” would impose costs at home.
Boris Johnson faced widespread criticism on Tuesday that British sanctions announced in response to Russian troops crossing into eastern Ukraine were not tough enough. The reaction came after the UK prime minister announced punitive measures in the House of Commons that targeted five medium-sized or small Russian banks and three billionaires close to Vladimir Putin. The move followed the Russian president’s decision on Monday night to recognise the separatist rebel enclaves in Ukraine’s Donbas region and send in the military. Johnson claimed the measures were “draconian” and would be ratcheted up, but Sir Iain Duncan Smith, former Conservative leader, warned the first sanctions did not go nearly far enough to “hit” the Russian government. In what he described as the “first tranche” of sanctions, Johnson announced an asset freeze and a ban on entering the UK on three oligarchs: Gennady Timchenko, and Boris and Igor Rotenberg.
GBP: Watch out for Bank of England speakers at 1030CET
Sterling is well bid against most major currencies overnight. A BOE deputy governor has said that only a “modest tightening” of monetary policy will be needed to keep inflation under control in the coming months. Employers have warned they will be flying blind from Thursday when all Covid-19 restrictions in England end as the UK government has failed to issue guidance on how to ensure workplace safety. Conservative MPs have threatened a parliamentary rebellion against Boris Johnson if the prime minister overturns a promise to ban imports of fur and foie gras. The president of the National Farmers’ Union has attacked Johnson’s government for having a “total lack of understanding of how food production works”, in a ramping up of rhetoric from the UK’s largest farming group. The food and drink industry is demanding “urgent action” to tackle a severe shortages of vets to process UK food exports after Brexit. Food producers estimate that Brexit-related bureaucracy, which has seen the number of official export forms to be filled increase 12-fold since January 2021, is costing the industry £60mn a year.
Euro is stronger against the dollar and weaker against sterling this morning. Western powers impose sanctions on Russia as Biden says Ukraine ‘invasion’ has begun, and Russian assets are set to bear the brunt of the Ukraine conflict. Plus, the FT’s Berlin bureau chief, Guy Chazan, explains what freezing the Nord Stream 2 pipeline project means for Germany. Meanwhile, European banks on Tuesday were bracing for the fallout from fresh global sanctions as the Ukraine crisis escalated, although U.S. bank executives said they expected the industry to be insulated from major disruption after pulling back from Russia in recent years. Europe’s banks – particularly those in Austria, Italy, and France – are the world’s most exposed to Russia, and for weeks have been on high alert should governments impose new sanctions against the country. The Dutch Weather Institute is issuing yet another weather warning for the incoming Storm Franklin.
The dollar is weaker than most major currencies in the early morning trade. Joe Biden has said that Vladimir Putin has started to invade Ukraine and is preparing to go much further into the country, potentially bringing “untold suffering to millions of people” in an all-out war. Meanwhile, Donald Trump has declared the invasion of Ukraine would never have happened if he was still president as he called Vladimir Putin a “genius.” The former US president accused the current one, Joe Biden, of being “weak” in his response to Mr Putin’s sending of forces into separatist enclaves in the east of Ukraine. Mr Trump also that warned oil and gas prices would rise to the benefit of the Russian president. Despite wide public support for banning lawmakers from trading stocks, members of both parties have expressed anxiety about the idea: a rare moment of bipartisanship in a divided America, but one whose subject, stock-trading politicians, is unlikely to please many voters.
Ballinger & CO. Morning Report- 23rd February 2022
GBP>EUR – 1.1995
GBP>USD – 1.3614
EUR>USD – 1.1348
GBP>CAD – 1.7298
GBP>AUD – 1.8744
GBP>SEK – 12.664
GBP>AED – 4.9994
GBP>HKD – 10.622
GBP>ZAR – 20.422
GBP>CHF – 1.2539
· 8:00 a.m.: Germany March GfK consumer confidence
· 8:30 a.m.: ECB’s Villeroy speaks
· 8:45 a.m.: France Feb. manufacturing confidence
· 11:00 a.m.: Italy sells bonds; Greece sells bills
· 11:00 a.m.: Euro-Area final CPI inflation
· 11:30 a.m.: Germany to sell bonds
· 12:30 p.m.: ECB’s Guindos speaks
· 4:00 p.m.: BOE’s Tenreyro speaks
· 5:00 p.m.: ECB’s de Cos speaks
· BOE Governor Bailey testifies before parliament’s Treasury Committee together with Broadbent, Haskel and Tenreyro
· Earnings include Barclays, Booking Holdings, TJX Cos, Iberdrola, Stellantis, Lowe’s