Possibility of Russian Invasion of Ukraine... Fed-Preferred US Inflation Indicator Released

[Image source=Yonhap News]

[Asia Economy Reporter Kim Hyunjung] This week, the global market is expected to be influenced by the possibility of Russia's invasion of Ukraine and the outlook on the intensity of U.S. monetary tightening.

On the 19th (local time), according to AFP, Vice President Harris stated on the second day of the Munich Security Conference held in Munich, Germany, "If Russia invades Ukraine, the United States will make it clear that it will impose massive and unprecedented economic costs together with its allies and partners." She emphasized, "The imposition of such comprehensive and coordinated measures will cause significant damage to those responsible."

Vice President Harris's remarks came amid the U.S. government's high assessment of the likelihood of a Russian invasion of Ukraine. The day before, U.S. President Joe Biden also said in a White House speech, "We have sufficient reason to believe that Russia will attack Ukraine within days," and that there is evidence President Vladimir Putin has decided to invade. Some media outlets, including Russia's Sputnik News, reported that Russia has begun preparations for war within its borders, such as opening the border in anticipation of an influx of refugees.

Inflation indicators that can gauge the intensity of U.S. monetary tightening will also be released. On the 25th, later in the week, the U.S. January Personal Consumption Expenditures (PCE) index will be announced, which is the inflation indicator preferred by the Federal Reserve (Fed).

The PCE price index for December last year, released by the U.S. Department of Commerce at the end of last month, showed a 5.8% increase compared to a year earlier, marking the steepest rise in 40 years since 1982. In particular, energy prices rose by 30%, and food prices increased by 5.7%.

The Fed is expected to raise interest rates at the Federal Open Market Committee (FOMC) meeting on March 15-16. Especially, James Bullard, President of the Federal Reserve Bank of St. Louis, expressed a preference for a 50 basis point rate hike in March. Investment bank JP Morgan also forecasted that the Fed will raise rates seven times this year.

In addition, corporate earnings announcements will continue this week. On the 22nd, Home Depot and Macy's will report earnings, followed by eBay, Hertz, and Barclays on the 23rd. On the 24th, earnings from Alibaba, Moderna, Daimler, Beyond Meat, Occidental Petroleum, and Etsy will be released.

U.S. real estate-related indicators will also be announced consecutively. On the 22nd, the December S&P/Case-Shiller Home Price Index and the fourth-quarter home price index for last year will be released, and on the 24th, January new home sales will be disclosed. On the same day, the weekly initial jobless claims in the U.S. will also be announced.

This content was produced with the assistance of AI translation services.