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The following is a summary of top news stories Tuesday.
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COMPANIES
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Boeing will no longer buy titanium from Russia, the company announced on Monday. Boeing has broadened its supply network in recent years and ‘has substantial titanium inventory,’ the company said. Last week, Boeing had already announced that it was suspending its business with Russian airlines because of the invasion of Ukraine and also due to Western sanctions. Aicraft manufactures use titanium in engine suspensions and landing gears. Russia plays an important role in supplying the industry through VSMPO-AVISMA, which belongs to the state-owned defence conglomerate Rostec.
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Japanese firms have started withdrawing personnel from Russia following a new travel warning issued by the government due to the war in Ukraine, the Nikkei business newspaper reported Tuesday. Leading carmaker Toyota ordered some 30 employees and their families to return to Japan. Toyota has already stopped production at its manufacturing plant in St Petersburg, noting supply chain issues. Car manufacturers Nissan, Subaru and Mitsubishi Motors were also preparing to recall staff from Russia, according to the report. Other Japanese firms active in Russia including Japan Tobacco, Daio Paper and Nippon Express Holdings have reduced their staff in Russia.
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M&G said it has delivered on all its demerger commitments, allowing it to unveil a new £500 million share buyback. The UK wealth manager said the buyback will begin shortly. M&G ended 2021 with £370.0 billion in assets under management & administration versus £367.2 billion at the same point the year prior. Its Asset Management unit booked £2.0 billion in net inflows, resulting in AuMA to rise to £156.7 billion from £144.4 billion. Its Retail & Savings unit, however, recorded £8.3 billion in new outflows following a £9.6 billion asset transfer to Rothesay Life as part of the firm's Heritage business run-off. Retail & Savings AuMA fell to £211.1 billion from £221.6 billion. Excluding its Heritage sell-off, net client inflows were £600 million in 2021. M&G declared total dividends of 18.3 pence in 2021, up slightly from 18.2p in 2020.
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Mexican precious metals miner Fresnillo said it was able to produce silver just below guidance in 2021, but gold production was ahead. That, together with higher prices, resulted in a rise in annual revenue. For 2021, pretax profit improved 11% to $611.5 million from $551.3 million, as revenue grew to $2.70 billion from $2.43 billion. Silver production was flat on the year before at 53,095 ounces, while gold production slipped 2.4% to 751,203 ounces. Fresnillo declared total dividends for 2021 of 33.9 US cents, up 31% from 25.8 cents in 2020.
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MARKETS
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European markets were staging a modest rally on Tuesday, while Wall Street was called to open fractionally higher. Commodity markets remained the focus for investors, as the gold price pushed above $2,000 an ounce. Meanwhile, the London Metal Exchange said it has suspended trade in nickel after the base metal rocketed to a record peak above $100,000 on Russian output concerns. ‘Following further unprecedented overnight increases in the three-month nickel price, the LME has made the decision to suspend trading for, at minimum, the remainder of today,’ it said in a statement after nickel spiked to $101,365 per tonne.
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CAC 40: up 0.9% at 6,033.34
DAX 40: up 0.3% at 12,870.81
FTSE 100: down 0.2% at 6,945.97
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Hang Seng: closed down 1.4% at 20,765.87
Nikkei 225: closed down 1.7% at 24,790.95
S&P/ASX 200: closed down 0.8% at 6,980.30
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DJIA: called marginally higher, up 7.00 points
S&P 500: called up 0.2%
Nasdaq Composite: called marginally higher, up 2.50 points
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EUR: up at $1.0878 ($1.0860)
GBP: unchanged at $1.3125 ($1.3128)
USD: up at JP¥115.57 (JP¥115.45)
Gold: up at $2,004.50 per ounce ($1,978.34)
Oil (Brent): up at $125.64 a barrel ($123.22)
(currency and commodities changes since previous London equities close)
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ECONOMICS AND GENERAL
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Russia planned to open humanitarian corridors in Ukraine on Tuesday for civilians to flee besieged cities, but Kyiv insisted the move was a publicity stunt and people would not be able to escape. Moscow's offer to evacuate residents was condemned because most of the routes led into Russia or its ally Belarus, and as the invading forces maintained a devastating shelling campaign. The Ukrainian military said Tuesday, nearly two weeks into the war, that Russia was ramping up its troops and equipment around the main conflict zones. Russia's defence ministry said it would open the ‘humanitarian corridors’ from 0700 GMT Tuesday, subject to Ukraine's approval, listing routes from the capital Kyiv as well as the cities of Mariupol, Kharkiv and Sumy all of which have been under heavy attack.
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Members of Parliament in the UK will hear from Ukraine President Volodymyr Zelensky about the Ukrainian plight as UK Prime Minister Boris Johnson continues his diplomatic offensive to encourage Western leaders to punish Russia for the invasion. Zelensky will address the House of Commons at 1700 on Tuesday by video link after Speaker Lindsay Hoyle approved a request for a ‘historic address’ from the Ukrainian president who, according to reports, is at risk of assassination by pro-Russian groups in Kyiv. He gave an address to the European Parliament last week and imparted a virtual message to the US Senate on Saturday, with the embattled leader expected on Tuesday to renew messages from those speeches to MPs, including pushing for the West to install a no-fly zone over Ukraine and for more arms to be delivered. The prime minister, who speaks with Zelensky on a regular basis, has consistently ruled out the UK policing Ukrainian skies, arguing it would mean shooting down Russian planes. On Monday evening, Johnson spoke with US President Joe Biden, French President Emmanuel Macron and German Chancellor Olaf Scholz, with the four leaders vowing to ‘continue to apply pressure on Russia to isolate Putin diplomatically and economically’.
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Zelensky denounced what he called unkept ‘promises’ by the West to protect Ukraine from Russian attacks. ‘It's been 13 days we've been hearing promises, 13 days we've been told we'll be helped in the air, that there will be planes, that they will be delivered to us,’ Zelensky said on a video broadcast on Telegram. ‘But the responsibility for that rests also on those who were not capable to take a decision in the West for 13 days,’ Zelensky added. ‘On those who have not secured the Ukrainian skies from the Russian assassins.’
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The European Commission is set to issue proposals on Tuesday that would rapidly free EU countries of their energy dependence on Russia. The war in Ukraine and the sanctions subsequently imposed on Russia have injected urgency into this endeavour, not only because Russian gas reaches the bloc via Ukrainian territory, but also due to fears that Russia could cut off supplies, which means alternatives must be found. The EU imports the vast majority of the gas it consumes. In 2019, Russian gas accounted for 41% of imports. According to a draft of the proposals seen by dpa, the commission wants EU gas storage facilities to be filled to at least 80% capacity on average by October, the beginning of the cold season. A commission spokesperson said facilities were currently at less than 30% capacity on average. The bloc is looking for new sources of gas, especially liquefied natural gas. According to the draft, talks are under way with major LNG buyers including Japan, South Korea, China and India, to divert surplus supplies to Europe by sea route.
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Russian Deputy Prime Minister Alexander Novak warned that a ban on Russian oil imports would have ‘catastrophic’ consequences, as Western allies consider further sanctions on Moscow over Ukraine. ‘A ban on Russian oil will lead to catastrophic consequences for the global market. The surge in prices will be unpredictable more than $300 per barrel, if not more,’ Novak said in remarks carried by Russian news agencies. Novak added that it would be ‘impossible’ to quickly replace Russian oil on the European market.
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The International Atomic Energy Agency said it has received reports of artillery shells damaging a nuclear research facility in Ukraine's besieged second city Kharkiv, but there was no ‘radiological consequence’. The Vienna-based UN body said Ukrainian authorities reported an attack took place on Sunday, adding that no increase in radiation levels had been reported at the site. Because the site's ‘inventory of radioactive material is very low’ and kept at a ‘subcritical’ state, the IAEA said ‘the damage reported to it would not have had any radiological consequence.’ The facility is part of the Kharkiv Institute of Physics and Technology, a research institute that produces radioactive material for medical and industrial applications.
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The eurozone's economy grew 4.6% on an annual basis in the fourth quarter of 2021, according to the latest estimate from Eurostat. The latest reading was in line with a Eurostat flash estimate in February. Growth was achieved despite the highly contagious Omicron wave spreading through Europe at the end of 2021, hurting the services sector in particular. Quarter-on-quarter, the single currency bloc's gross domestic product was 0.3% higher, also in line with the previous estimate. For 2021 as a whole, the eurozone economy expanded by 5.3%, recovering somewhat after a 6.4% fall in 2020.
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German industrial production in January was significantly ahead of market consensus, data from the Federal Statistical Office showed. Industrial production was up 2.7% in January on the previous month, coming in sharply ahead of the 0.5% growth predicted by the market, according to FXStreet, and accelerating from December's 1.1% rise from November.
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UK retail sales growth accelerated last month as fashion and homewares benefited from the easing of pandemic restrictions, according to new figures. The latest British Retail Consortium-KPMG retail sales monitor revealed that total sales jumped by 6.7% in February, as the removal of Plan B restrictions improved footfall. Nevertheless, retail experts highlighted that the high sales figures were buoyed by soaring inflation and added that Storm Eunice and waning consumer confidence did have some impact of sales for the month. UK retail sales were 2.7% higher than in February 2021 on a like-for-like basis, the report added.
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Retail sales in Italy ticked lower in January, according to the latest flash estimate by Italian national statistics office Istat. Retail sales were down 0.5% in value terms in January from the month before, following a downwardly revised 0.8% increase in December. The January result missed market expectations cited by FXStreet of a 1.1% rise. In volume terms, sales were down 0.7% on a monthly basis. On an annual basis, retail sales were up 8.4% in value terms, following an upwardly revised 9.8% increase in December and by 7.3% in volume terms.
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The death toll from week-long floods battering Australia's east coast rose to 20 on Tuesday, after the bodies of a man and a woman were discovered in floodwaters in Sydney. Police said it was ‘suspected’ the pair are a missing mother and son whose car was abandoned in a stormwater canal. Tens of thousands of Sydney residents have been told to evacuate their homes as severe storms and flash flooding inundated swathes of Australia's largest city Tuesday. The national weather bureau warned of ‘a tough 48 hours ahead’ for Sydney, with 60,000 people subject to evacuation orders and warnings across the affected areas, according to emergency services.
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