Here is our summary of key economic events overnight with news that all bets are off following the Russian military attacks on a major Ukrainian nuclear power plant that they have captured. No excessive damage has resulted, but no economic news is remotely as significant as the construction disaster there.

But there’s economic news, and it’s our job to report it, so there you go. (And it’s not like it’s minor.)

World food prices have risen sharply in February, up nearly +4% in one month, up +24% in one year. This represents a new all-time high, surpassing the previous record set in February 2011 by 3.1 points. February’s rise was led by strong price increases for vegetable oils (+37%) and dairy products (+25%). The prices of cereals (+15%) and meat (+15%) are also on the rise. And of course, the global tensions in March mean that this is only the beginning of an extreme tension on food prices. Rising post-pandemic demand in the recovering first world, stable supply everywhere, and new and growing safety and supply chain uncertainties are all conspiring to drive food stress. These tensions will bring new “security” stresses between nations.

The American Economy added +678,000 jobs in February (seasonally adjusted), the most in seven months and well above market forecasts of +400,000. Job growth was broad-based. (The actual rise was almost +1.5 million from the previous month, but January is still seasonally low.) Their unemployment rate fell to 3.8%, lower than expected. Their participation rate increased again, slightly. Average weekly earnings rose +5.4%, and the fastest pace since March 2021. But markets shrugged off this news in the face of security concerns in Europe. Still, this labor data will likely keep the Fed on track for a rate hike in two weeks.

Vehicle sales in the United States were just over 14 million in February (annualized rate) and down sharply from the rate of 15 million in January. But supply problems are hampering this development.

from Brazil economic growth was +1.6% in Q4-2021 and while expectations are low for this data, it is well below the +4.0% rise in Q3-2021.

Venezuela has practically given up on fighting hyperinflation. But yesterday he raised the minimum wage by nearly 300%, from NZ$0.93 to around NZ$3.50. It’s not per hour, as you’ve probably assumed. It’s per month! And in local currency, the new monthly minimum wage is now 7 million bolivars. Yes, 7 million of their change is now worth NZ$3.50. It’s hyperinflation.

In Japan, a major truck manufacturer said it has been falsifying the emissions data of its products for years.

There are big political meetings in China, but they are all overshadowed by the Russian invasion. At home, they’re about to set a low growth target, in fact the lowest they’ve ever set, probably below 5%. It is to recognize that their economy is floundering. They need it to improve because they have tens of millions of young people joining their workforce, all with high income expectations that will be hard to meet. New aggressive stimulus probably not far away. Certainly, interest rate cuts are close now. the iron ore price is on the move again.

Retail sales in Hong Kong languish. December trade was revised down, and January’s annual balance was weak, and off a weak base. January 2022 sales were massively -30% lower than January 2019.

The currency of Russia is at a new record low, again weakening very sharply overnight. So far, key Western policymakers have exempted oil from their sanctions. But this morning we to learn that Washington is preparing to include Russian oil in the blockade. This will not help the ruble.

S&P downgraded Russia’s rating from “BB+” to “CCC-” as default risk rose sharply again. Moody’s and Fitch lowered their ratings again. The note explanation is here.

The Russian parliament rushed to pass a new law punishing the dissemination of “false information” about the Russian armed forces with up to 15 years in prison. Calling the Ukrainian action a “war” or an “invasion” is now a crime.

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In most of the world, Russia is losing the information war against Ukraine. In China, however, he wins big. Beijing threw its hat into the ring on the Russian side.

For the World Bank, the invasion of Ukraine is a global economic disaster. It is no longer possible to obtain insurance for shipments to or from Russia.

Meanwhile the EU retail sales did not rebound as strongly in January as expected, a worrying underperformance considering what happened next.

We have recently highlighted sharp increases in the prices of many commodities, and coal reached a new record yesterday, just like aluminum. It seems like a daily feat lately and we’re used to these spikes, even though we know they’re brewing to cause serious long-term global inflation. But Dr. Copper is missing from the list. The copper demand has been driven in recent years by demand for Chinese infrastructure, and China’s economy is in turmoil, so copper has not participated in the current commodity price frenzy – which has been a good thing, because it is already expensive and widely used. But today everything has changed. Copper prices skyrocketed overnight to a new high of US$10,820/tonne. Supply concerns rather than demand pressures are driving the jump.

Readers of our rural pages will have noted that local carbon prices have receded recently. They ended the week at NZ$78.50, down -10% in one week. In China, their carbon market is barely functioning. the EU carbon price fell even more sharply, -30% in one week to €66/tonne (NZ$105/tonne). This all seems odd, given record fossil fuel demand and prices, and it calls into question whether these carbon market prices are giving useful climate signals. Given the fall in the EU price, NZU holders could face steep losses next week. Carbon market prices respond to “normal” financial market signals, not IPCC data.

The 10-year UST yield opens today at 1.72% and down -13 basis points from the same time yesterday. A week ago it was at 1.99%, but risk aversion has since set in. (But remember, at the start of 2022 it was only 1.52%.) The UST 2-10 yield curve starts today even flatter at +26 basis points. Their 1-5 curve is flatter at +62 bps and their 30 day-10 year curve is also much flatter at +156 bps. Australia’s ten-year bond is down -2 basis points at 2.14%. The 10-year Chinese government bond is down -1bp at 2.85%. And the New Zealand 10-year government is unchanged at 2.79%. It should also be noted that while New Zealand benchmark government bond yields are stable or low, wholesale swap rates continue to rise and principals are back to 2016 levels now.

Wall Street’s Friday trade is now down -0.6% on the S&P500, in ongoing afternoon trade, and heading for a relatively minor decline of -0.4% for the week. European markets overnight all crashed between -3.5% and -5%. Over the week, London fell -6.7%, Paris fell -8.4% and Frankfurt fell -8.2%. Yesterday, Tokyo ended its Friday session down -2.2% and taking its weekly decline to -1.8%. Hong Kong was down -2.5% yesterday and ended its week down -4.0%. Shanghai was down -1.0% yesterday, but ended its week with only a minor loss of -0.1%. The ASX200 ended down -0.6% yesterday, but that capped a weekly gain of +1.6%. The NZX50 also fell -0.6% on the day but ended its week with a stellar rise of +1.8%. (The Moscow Stock Exchange is still closed, for a sixth day.)

The price of gold starts today at US$1962 and up to +US$33/oz from the same time yesterday. This is a weekly increase of +US$78/oz or +4.2%. At the start of 2022, this price was US$1,814/oz, so it is up +8.2%. (It easily beats bitcoin at present for its price performance in 2022.)

And oil prices are even higher today and at a level of +US$2/barrel. In the US they are now slightly above US$110/bbl. The international price is slightly above US$113.50/bbl. A week ago the international price was US$93.50/bbl and that seemed high. At the start of the year, it was slightly below US$80/bbl. The rise since has been +40%.

The Kiwi Dollar will open today sharply higher at 68.6 USc and up +¾c. Against the Australian dollar, we are at 93 AUc and strengthening. Against the euro, we are at 62.8 eurocents and up nearly +1½c. This means that our TWI-5 starts today at just 73.6 and its highest level since late November. If it continues, this will reduce some of the inflationary pressure from imported tradable goods. Not many, but a few.

Bitcoin price is lower today down -3.7% from the same time yesterday at US$40,871. Over the week, it is up +4.2%; Since the beginning of the year, it is down -13%. Volatility over the past 24 hours has been moderate at +/- 2.8%. central bank of china noted the country’s share of global bitcoin trade has shrunk to 10% from a peak of over 90% before Beijing’s crackdown.

The easiest place to stay on top of the risks associated with today’s events is to follow our Economic calendar here ».