Weekly Excerpt - March 7

International Economics | Conflict between Lands and Portfolios

As if it were not enough to face the difficulties of the pandemic, the conflict between Russia and Ukraine began with force and during the week new participants joined both sides of the confrontation, NATO members have imposed sanctions and there is talk of more to come in the short term for Russia if this event continues to affect the international economy.

These include those of the United States, the European Union, the United Kingdom and Canada who, in the wake of continuing conflicts between Russia and Ukraine, have banned certain Russian banks from interacting with the SWIFT system (the highly secure network that facilitates payments between 11,000 financial institutions in 200 countries). Earlier this week, Germany halted certification of Nord Stream 2 gas pipelines following Moscow's actions.

Likewise, the Moscow Stock Exchange has been closed until further notice and the accounts of Russians, mainly politicians and other executives, have been frozen in countries such as Switzerland and asset transactions have been halted by regulatory agencies as a sanction measure for the conflicts between both nations affecting the international economy.

Gold, Silver and Ecru Vests

It has been seen that the market turns to defensive means in times of uncertainty and in that trend the materials, energy and precious metals sectors have been the most positive of the week.

Inflationary concerns have only worsened as crude oil soared to hover near multi-year highs, with West Texas intermediate and Brent crude prices rising more than 40% so far this year and remaining well above $100 per barrel, a reaction to the uncertainty now being generated by the Ukraine-Russia conflict on markets and the international economy.