Issue 3 – The week of February 28th, 2022

Key Resistance and Supports : Upcoming Week

Reports of Note due out this week:

Monday

• US wholesale inventories
• US Chicago purchasing managers index
• CAD current account
• CAD industrial product price
• CAD raw material price index

Tuesday

• CAD gross domestic product
• CAD manufacturing PMI
• US manufacturing PMI
• US Johnson Redbook
• US crude oil stocks

Wednesday

• CAD interest rate decision
• CAD interest rate statement
• US ADP employment report
• US FED beige book

Friday

• US non-farm payrolls
• US employment report
• CAD Ivey PMI
• US CFTC net gold positions

Geopolitics

The Russian invasion of Ukraine is front and center this week. The scale of the invasion has caught many people off guard. While many expected some kind of limited incursion the Russians have surprised most with a six-pronged invasion from the north, south and east.

The invasion though is being met with fierce resistance from all levels of the Ukrainian population. All men aged 18-60 have been conscripted into service. From all indications, people are resolved to defend their homes. It appears that resistance is frustrating the Russian advance in Ukraine with mounting casualties on both sides.

A select group of Russian banks are set to be removed from the SWIFT network which facilitates quick international payments. This would be the most severe sanction imposed so far against the Russians. To date, no sanctions have been imposed on Russian energy companies and probably won’t be. Russia is the world’s third-largest producer of crude oil after the US and Saudi Arabia and the second-largest producer of natural gas after the US. If the energy companies are sanctioned, driving up the cost of crude and natural gas, in turn severe upward pressure would be put on already multi-decade-high inflation.

There are reports that Russia and Ukrainian delegates will meet to start some kind of peace negotiations. Hopefully, they will be able to come to some kind of agreement that ends this insanity.

In early Asian trading, gold is trading back above $1900 and crude oil is pushing towards $100 per barrel again. The Russian rouble is in free fall today. Market volatility will continue along with exaggerated price fluctuations until the Ukrainian situation begins to calm down.

The Russian invasion of Ukraine is front and center this week. The scale of the invasion has caught many people off guard. While many expected some kind of limited incursion the Russians have surprised most with a six-pronged invasion from the north, south and east.

The invasion though is being met with fierce resistance from all levels of the Ukrainian population. All men aged 18-60 have been conscripted into service. From all indications, people are resolved to defend their homes. It appears that resistance is frustrating the Russian advance in Ukraine with mounting casualties on both sides.

A select group of Russian banks are set to be removed from the SWIFT network which facilitates quick international payments. This would be the most severe sanction imposed so far against the Russians. To date, no sanctions have been imposed on Russian energy companies and probably won’t be. Russia is the world’s third-largest producer of crude oil after the US and Saudi Arabia and the second-largest producer of natural gas after the US. If the energy companies are sanctioned, driving up the cost of crude and natural gas, in turn severe upward pressure would be put on already multi-decade-high inflation.

There are reports that Russia and Ukrainian delegates will meet to start some kind of peace negotiations. Hopefully, they will be able to come to some kind of agreement that ends this insanity.

In early Asian trading, gold is trading back above $1900 and crude oil is pushing towards $100 per barrel again. The Russian rouble is in free fall today. Market volatility will continue along with exaggerated price fluctuations until the Ukrainian situation begins to calm down.

Last Week in Review

Last week’s recap

• Putin recognized Ukraine’s breakaway regions Donetsk and Luhansk as independent sending in Russian troops as “peacekeepers”
• Equity markets sink, precious metals and oil markets rally
• On Tuesday German Chancellor Olaf Scholz blocked the certification of the Nord Stream 2 gas line which runs directly from Russia to Germany
• Wednesday Russian forces launched a full-scale invasion of Ukraine sending global markets on a whirlwind roller coaster of volatile price action.
• Gold rose as high as 1974, a price not seen for 13 months before coming off the next two sessions to close the week at a loss
• Silver had an equally wild ride climbing as high as 25.64 before falling to close at 24.30 which still managed to be close on the plus side

	Gold	Silver
Open	1905	24.02
High	1974	25.64
Low	1878	24.30