Global markets press the "safe haven" button, commodity prices are expected to rise

On February 24, affected by the geopolitical situation, the risk aversion sentiment in the global market increased sharply, the major stock indexes in Europe and the Asia-Pacific region weakened significantly, and the futures prices of gold, silver, crude oil and natural gas rose across the board
.
Institutional sources said that prices of energy and agricultural products are expected to rise, and inflation in Europe and the United States will rise further
.

Global financial markets are hit

On February 24th, the global financial market fluctuated sharply, all major stock indexes fell across the board, and the commodity market was favored by safe-haven funds
.

Major stock indexes in the Asia-Pacific region ended markedly lower
.
Among them, among the three major Chinese A-share indexes, the Shanghai Composite Index fell 1.
70%, the Shenzhen Component Index fell 2.
20%, and the ChiNext Index fell 2.
11%
.
Among the major indices of Hong Kong stocks, the Hang Seng Index fell 3.
21%, and the Hang Seng China Enterprises Index fell 3.
44%
.
In addition, South Korea's Kospi fell 2.
60%, the Nikkei 225 fell 1.
81%, Australia's S&P 200 fell 2.
99%, and New Zealand's NZX50 fell 3.
31%
.

In the European financial market, on the morning of February 24, local time, the Moscow Stock Exchange announced that all trading was suspended, and when it will resume trading will be notified separately
.
It was subsequently announced that trading would resume at 10 a.
m.
local time
.
However, the two major stock indexes continued to tumble after the opening.
As of 17:15 Beijing time, the Russian RTS index fell by more than 38%, and the Russian MOEX index fell by more than 34%
.
Other major European stock indexes also opened lower across the board, with Britain's FTSE 100, Germany's DAX and France's CAC 40 all down more than 2%
.

In addition, U.
S.
stock index futures also tumbled in early European trading hours.
Nasdaq futures fell more than 3%, and S&P 500 futures and Dow futures both fell more than 2%
.

At the same time, the prices of international crude oil, natural gas futures and gold and silver futures with outstanding safe-haven attributes all rose significantly
.
Among them, the price of Brent crude oil futures broke through $100 a barrel during the session
.

Rising energy prices push up inflation

Industry institutions and experts believe that it is necessary to pay close attention to the impact of rising energy prices caused by geopolitical factors on inflation
.

Yang Aozheng, chief Chinese analyst at FXTM, analyzed that from the perspective of the financial market, the current geopolitical situation will lead to further rise in energy prices, and the negative impact of the deterioration of the situation on the stock market in some regions is inevitable
.
Yang Aozheng believes that the current inflation rate in Europe and the United States has reached a new high in nearly 40 years.
In addition, the new crown epidemic has not eased, and it is difficult to solve the problems of import and export freight and supply chain disruptions in the first half of this year
.
Since Russia plays a key role in Europe's energy supply, especially in crude oil and natural gas, which supplies about 35% of Europe's natural gas, if the geopolitical situation continues to escalate, natural gas prices will rise again
.
Overall, it is expected that inflation rates in Europe and the United States will further rise, and the Fed may need to speed up the pace of interest rate hikes.
The call for a 50 basis point interest rate hike in March will be higher, and the downward pressure on the stock market will increase
.

Kristina Hooper, chief global market strategist at Invesco, said that for the stock market, geopolitical factors will amplify market volatility and potential market sell-offs brought about by tighter monetary policy
.
The pressure and volatility faced by the different regional markets will continue, but this may be short-lived
.
Natural gas prices are of particular concern because it tends to be transported by pipeline and is more localized rather than shipped by sea from exporting countries to importing countries
.
In other commodities, Russia is the largest exporter of palladium and a significant exporter of other metals
.
Meanwhile, Ukraine and Russia are both major producers of wheat and corn
.
Therefore, if the geopolitical situation continues to heat up, the prices of related commodities are expected to rise
.