Evidence of Atrocities in Ukraine:
Over the weekend further evidence emerged of Russia’s heinous acts of violence against Ukrainian civilians, including massacres, rape, torture, and pillaging. President Zelensky accused Russian forces of genocide as images of places such as Bucha (to the northwest of Kyiv) show scenes of atrocities and mass graves as some Russian forces go into retreat. Subsequently, Members of the international community have condemned the violence with Macron urging for further sanctions and the United Nations Secretary-General António Guterres calling for an independent probe.In spite of the Kremlin’s commitments to withdraw troops around Kyiv, the Ukrainian military are claiming that the Russian campaign has undertaken a “hidden mobilisation” of some 60,000 troops to support units devised thus far by the fighting. Fierce fighting also continues in the strategically significant southern port city of Mariupol and Odesa was again hit by an airstrike last night.
As the fighting continues and evidence of war crimes and crimes against humanity grows, the prospect of finding a diplomatic solution appears ever more difficult despite negotiations in Turkey last week.
The Independent has more:
Hungarian Elections
In Hungary Viktor Orban has won a fourth prime-ministerial term after his Fidesz party took 53.1% of the vote. Over the past twelve years Orban’s nationalist party have made major changes to the constitution as well as removing civil liberties and blurring the division of power between the executive, legislative and judicial offices. Hence, over 200 international observers including the Organization for Security and Co-operation in Europe (OSCE) were present to monitor the vote – although little has been reported thus far on the freeness or fairness of the election. Indeed, many members of the European Union have expressed concern over Orban as his populist anti-EU stance in addition to his apparent closeness to Putin. In fact, in recent weeks Orban has banned Hungary as a route to deliver weapons to support Ukraine’s campaign against Russia and made comments over the weekend calling Brussels and Zelensky ‘opponents’. Hence, with another four-year mandate both Brussels and Kyiv will be holding their breath to see Orban’s next moves and geo-political positioning.
Covid Cases Surge Across the UK
Alarmingly, The Office for National Statistics (ONS) are estimating that almost five million people in the UK have covid as the Omicron variant BA.2 spreads rapidly. This figure, which roughly represents one in 13 people comes as many experts criticised the Government’s ending of free testing and are calling for its return. The major surge in cases is having a significant impact on many companies’ ability to deliver goods and services, with EasyJet cancelling more than 200 flights this weekend due to covid-related staff shortages.
Markets Prepare for Governor Bailey’s Speech
This morning, all eyes will be on the Bank of England’s Andrew Bailey who is speaking shortly after 10:00. As CPI hits four-decade highs of 6.2%, it appears that there is an increasing disconnect in the rhetoric between how many rate hikes the BoE are outlining and what the market is expecting. For example, the general market expectations predict the base interest rate to be around 2.25-2.5% by Q2 2023 while it appears that the BoE are forecasting it to be around 1.5%. Hence, the markets wil be focusing on any further information on the extent to which the BoE may be willing to raise rates, while also ensuring that growth moving forward remains stable. Today, Bailey’s speech is sandwiched in between two other MPC members, Catherine Mann and Jon Cunliffe. Of course, at the BoE’s latest interest rate decision, their dovish approach caught the market by surprise as eight members of the committee voted to hike by 25bp while Jon Cunliffe voted to keep rates unchanged. In contrast, just a few weeks earlier, there had been murmurings of the prospect of a 50bp rise – however this was subdued following the Russian invasion of Ukraine. The BoE’s dovish sentiments emphasises how Threadneedle Street are deeply concerned over the prospect of growth for the UK economy.
Have a great day.
