The key US stock market indices - Dow Jones, NASDAQ, and S&P 500 - ended Wednesday with strong growth. Naturally, the catalyst for this growth was the Fed meeting and Jerome Powell's speech. And although the results of the meeting can be safely called "hawkish", the market did not react at all as one would expect. However, let's move away from the topic of the Fed and recall that Powell also drew attention to the conflict in Ukraine, which in itself provokes an increase in energy and food prices since the flow of both these types of goods to Europe originated in Russia and Ukraine. The Russian Federation may now be cut off from Europe for many years due to the discouraging sanctions on the part of the European Union, and Ukraine will first have to complete military operations on its territory, and then it will have many years of recovery. Therefore, Europe (and the whole world, too) may face an energy and food crisis. By the way, natural gas quotes continue to grow and yesterday they were already about $ 1,600 per 1,000 cubic meters. From our point of view, the situation will only get worse. Oil is also rising in price again, its value is again approaching the $ 110 per barrel mark. Meanwhile, the European Commission has proposed to the EU member states a draft of the sixth package of sanctions against Russia.
It is proposed to approve the introduction of a phased oil embargo, increase pressure on the Russian banking system (disconnection from Sberbank's SWIFT), expand the list of individual sanctions, and prohibit any real estate transactions for Russians. "All these measures will deprive the Russian economy of the ability to modernize and diversify. Putin wanted to wipe Ukraine off the face of the earth, but he will not succeed. Ukraine has risen and united, and his country, Russia, is going to the bottom," Ursula von der Leyen said. According to various sources, the only country that currently opposes the oil embargo is Hungary, whose leader Viktor Orban openly supports the Russian Federation. However, as we have repeatedly said, the European Union knows how to work with troublemaking countries. Most likely, political pressure will be exerted on Hungary, and she will eventually agree to the embargo. Moreover, Hungary and Slovakia are granted a grace period of refusal of oil from Russia for 20 months. Thus, the sixth package of sanctions is likely to be adopted. And the markets will only have to watch how oil and gas prices continue to rise, as well as closely monitor the situation around the redirection of the flow of hydrocarbons from Russia from Europe to Asia. Recall that, according to some unconfirmed reports, if there is a discount, China and India are ready to buy back excess volumes of oil from Russia. However, there is also no doubt that the United States will intervene in this process and threaten these countries with secondary sanctions. In principle, these sanctions will work only if the whole world refuses to buy Russian oil and gas. If only Europe refuses, and hydrocarbons will now be sold simply to other countries, then Moscow will greatly benefit from these sanctions.
