The Day at a Glance | February 28 2022

The Top

*Russia starts diplomatic negotiations with Ukraine; military encounters continue around Ukrainian territory.

*West excludes some Russian banks from the SWIFT international payment network; limits transactions on Central Bank of Russia.

*Russia`s Central Bank aggressively increased interest rates and implemented capital controls in order to stop the Ruble`s depreciation.

*Unemployment in Mexico falls to 3.7% during January.

*China`s PMIs will be made known tonight (Manuf. 49.9e.; Non-manuf. 50.8e.).

Economic environment

New sanctions on Russia. During the weekend, several Western countries announced new sanctions on Russia as a response to its invasion of Ukraine. The United States, Europe, United Kingdom and Canada agreed to exclude several Russian banks from the SWIFT international payment network and announced measures to prevent Russia`s central bank from using its international reserves. The banks excluded from SWIFT are those that had already faced sanctions on behalf of the West, but it was announced that new banks could be included, if necessary. The United States is actively looking for sanctions to not affect the trade of energy in order to avoid an increase in oil or natural gas prices. Regarding sanctions on the central bank, the West seeks to prevent it from using its international reserves to back the ruble and its banking system; they are trying to prevent Russia from using gold and hard currency reserves that Russia has abroad. Sanctions are much more severe than those initially announced and are trying to force Russia out of Ukraine. Today, Ukraine`s President, Volodymyr Zelenskiy will meet with Russian representatives in Belarus for a second consecutive day and try to find a peaceful solution. Ukraine`s capital, Kyiv, is still under the control of the Ukrainian army, despite a fast advancement of Russia`s troops during the weekend.