The Day at a Glance | March 8 2022

The Top

*EU considers issuing debt to finance energy and defense spending in the middle of the geopolitical crisis.

*Productivity in Mexico fell (-) 1.2% in the 4Q21.

*Russia threatens Europe with halting the supply of natural gas as retaliation if sanctions are placed on Russian oil.

*China considers investing more money in Russian State energy and raw material companies in order to cover import necessities.

*In Europe, a 4.6% annual rate of GDP growth was confirmed in the 4Q21.

*LME temporarily suspends nickel trading after a 250% unprecedented increase.

*Chinese authorities revise exposure to the local financial sector in light of volatility in the raw materials market.

Economic environment

The EU considers issuing new debt. In the middle of Ukraine`s geopolitical crisis, the European Union is considering a second debt issuing in order to finance energy and defense investment. The measure essentially seeks to reduce the negative impact that isolating Russia will have, considering that it`s an important trade partner for the region, especially regarding energy; and to reinforce Europe`s defense. Recent negotiations between Ukraine and Russia have not been successful and the military conflict shows no signs of stopping. Diplomatic tensions can still be seen. Russia even threatened to suspend the supply of natural gas to Europe in case it sanctions Russia`s oil exports. With this, the European Commission has started to design a plan to reduce the region`s dependency on Russian energy in about 80% during 2022. Part of the financing will be obtained by issuing joint debt – this would be the second time this happens in the block`s history. The EU issued joint debt worth 1.8 trillion euros a year ago in order to finance an economic recovery package after the pandemic. The European Commission is expected to reveal more details about the debt issuance next week. European leaders will hold an emergency meet in in Versailles, France this week to establish details regarding the size of the issuance and how the resources will be used.