Investment news
The gold price went down as U.S. Treasury yields rose on expectations that the Fed will aggressively hike interest rates to fight runaway inflation that has hit its highest level in 40 years.
Here’s how the prices of gold, silver, platinum, and palladium have changed over the past week:
The IMF slashed its forecast for global economic growth by nearly a full percentage point, citing Russia’s invasion of Ukraine, and warned that inflation was now a "clear and present danger" for many nations. (Reuters)
"What has Russia's invasion of Ukraine cost? A crisis on top of a crisis, with devastating human costs and a massive setback for the global economy," IMF Managing Director Kristalina Georgieva said.
Read our SPOTLIGHT to learn how the war in Ukraine could affect your investments.
Natural gas prices have been on the rise since the war in Ukraine and Western sanctions curtailed demand for Russia’s oil and gas exports. (WSJ)
For example, the U.S. natural gas futures for May rose more than 4% last week, a 96% rise in the year to date.
The price of corn 🌽 has hit a 9-year high as the surge in commodities' prices continues, in part due to the war in Ukraine. (CNBC)
The contracts for July corn futures were trading above $8 per bushel on Monday, the highest level since September 2012. To compare, the contracts were trading around $6 per bushel at the start of the year.
If you think inflation is bad in your country, have a look at Russia: Russian inflation reached an annual 16.7% in March. (CNBC)
“For Russia as long as Putin remains in power, and because of all the war crimes committed in this war and revealed for the world to see, Russia will remain an international pariah for years to come,” Timothy Ash, senior emerging market sovereign strategist at Bluebay Asset Management, said.
“It will remain in default on its foreign debts for years to come, isolated from international capital markets, starved of investment, increasingly cut off from international trade and business - cut out of Western energy and commodity supply chains - suffering recession and stagnation, falling living standards and increased capital flight and brain drain,” he added.
Following Beijing’s crackdown on the property sector, buyer sentiment has sagged significantly, exacerbated by Covid-19 outbreaks.
Read our SPOTLIGHT to learn more about China’s housing bubble and how it can affect the global economy.
Opinion
So is a recession really coming? “Beset by plague, war, ships that can’t stop getting stuck in things, and a Fed newly determined to crush inflation, it feels as if this economy is cruising for a bruising the likes of which we haven’t seen since 2008 or maybe even 1982,” writes Bloomberg’s Dan Moss.
But take some deep breaths, it might not be as bad as it seems, because almost nobody sees a recession happening this year.
“There’s just too much momentum and stimulus money sloshing around. Beyond that? Good luck guessing the future courses of the pandemic, Ukraine war, and supply-chain disasters, and then plugging those into the chaos of a sprawling, messy global economy,” Moss says.
Read our SPOTLIGHT to learn more about looming recession risks and what could they mean for precious metals investors.
What else is happening
🇫🇷 French election: The result of Sunday's election in France will determine whether President Emmanuel Macron, a pro-European centrist, or far-right, anti-immigration Marine Le Pen, will lead the European Union's second-largest economy for the next five years. (Reuters)
Polls show that Macron is likely to win a second term, and his lead has grown since both candidates qualified for the runoff.
However, polls also point to a much smaller gap between Macron and Le Pen than when he beat Le Pen with 66.1% in 2017, and Le Pen’s victory cannot be ruled out, even if it is the less likely of the two scenarios.
Russia and Ukraine’s battle for the eastern Donbas region could decide the war: It could determine how Ukraine’s territorial boundaries will look in weeks and years to come. (CNBC)
“I think it’s pretty clear annexation is Putin’s long-term goal, how much annexation is the question,” Maximilian Hess, a fellow at the Foreign Policy Research Institute, said.
Approaching famine? With corn prices at a decade high and wheat prices skyrocketing, the United Nations has warned that an additional 13 million people could be left undernourished. (Spiegel International)
According to David Beasley, director of the World Food Program, the result could be greater than anything seen since World War II.
WFP relies on Ukrainian cereals to feed approximately half of the 125 million people it assists. In a recent address to the UN Security Council, Beasley warned that WFP may soon be forced to ration food to the hungry to save the starving – and that the situation could lead to global unrest and mass displacement.
And finally…
🪐✨ Jupiter’s moon Europa may have water where life could exist, scientists say. (Reuters)
A saltwater ocean exists deep within Europa's thick ice shell. And according to a new study, Europa's ocean may be habitable due to a surprising connection between the ice shell and the Greenland ice sheet on Earth.
"In Greenland, this double ridge formed in a place where water from surface lakes and streams frequently drains into the near-surface and refreezes," said lead study author Riley Culberg, a doctoral student in electrical engineering at Stanford, in a statement.
"One way that similar shallow water pockets could form on Europa might be through water from the subsurface ocean being forced up into the ice shell through fractures -- and that would suggest there could be a reasonable amount of exchange happening inside of the ice shell,” the statement continued.
See you next week!
