- US futures fell as the Kremlin cast doubt on claims of progress in the Ukraine peace negotiations, adding to concerns about the economy's prospects as the Federal Reserve's anti-inflation campaign gets off.
- The S&P 500 and Nasdaq 100 indexes both extended losses, while the Stoxx Europe 600 index lost ground. Dmitry Peskov, a spokesperson for the Kremlin, denied rumours that the warring parties are nearing an agreement, blaming Kyiv for delaying the talks. Futures were already swaying as the bond market warned that the Fed's efforts to keep prices in check may lead to a recession.
- The Federal Reserve hiked borrowing prices by a quarter percentage point and announced raises for all six of its remaining meetings in 2022, with the policy rate expected to reach 2.8% by the end of 2023. The US economy is extremely robust, according to Chair Jerome Powell, and can withstand monetary tightening. Treasury rates rose, while a portion of the bond curve (the difference between five- and 10-year yields) flipped for the first time since March 2020, signalling that investors foresee economic difficulties.
- ECB's President Lagarde: The war could cause the start of new inflationary trends.
- Russia's Finance Ministry: Our order to pay $117.2 mln in interest on two Eurobonds was fulfilled.
- Germany's IFW reduces forecast for Germany's 2022 GDP growth to 2.1% (vs previous forecast of 4%).
- Money Markets now price in 50 BPS of ECB rate hikes in total by year-end vs around 45 BPS on Wednesday.
- ECB's Villeroy: The Ukraine war will cost the French economy roughly 1% of growth.
- ECB's Villeroy: There is no risk of recession at the moment from the Ukraine war even amongst high uncertainty.
