Oil and global stagflation are the main drivers. Oil prices rose 10% Monday due to the US and European bans on Russian products. Talks with Iran are still stalled. Brent was quoted at $12.73 more at $130.84 while US crude rose $9.92, to $125.60.
According to reports, Nancy Pelosi, the US House Speaker, is currently looking into legislation that would ban Russian oil imports. This was a topic that has agitated markets openly.
Pelosi stated last Thursday that she supports the US banning Russian oil imports. Biden has been reluctant in curbing Russian oil shipments to America or to impose energy sanctions on Americans whose pockets are already being impacted by the rising prices. The sanction is supported by a large number of Republicans and a growing number of Democrats.
The start of the year for commodity prices is generally strong, surpassing any year since 1915. Last week saw nickel rise 19%, aluminum 15%, zinc 12% and copper 8%. Wheat futures surged 60%, and corn 15%.
This week’s US Consumer Price Index is crucial for markets. It shows that annual growth of 7.9% and core measure of 6.4% are both possible. These numbers will be feared ahead European Central Bank meeting next week. As they take to the moon, the divergence between these two banks is driving the demand for the greenback.
