The IHS Markit Russia manufacturing PMI fell to 48.6 in February from 51.8 in the previous month. This marks the first decline in the sector in five months and the lowest reading since last August. Production and new orders in the Russian economy fell for the first time in six months due to weak domestic and foreign demand.
The reason for the recession in Russian industry, however, is not conflict, as that is not yet included in the survey, but the impact of a pandemic, Markit reported.
War will deepen losses
The impact of the conflict in Ukraine will be even more severe for the Russian economy. According to Markit, purchasing activity fell for the first time in six months. At the same time, employment fell at the fastest pace since last August due to lower production requirements.
On the price front, input cost inflation accelerated in Russia to its fastest level since last June as firms widely linked rising input prices to rising supplier costs, while output inflation accelerated to an eight-month high. Noteworthy, industry sentiment rose to its highest level since August 2019 on hopes of further growth in customer demand and investment in new technologies and production processes - this is unlikely to happen, however, due to the sanctions imposed.
Coal time
There is a moderate calm on the world markets. Oil and gas prices are not subject to above-average volatility. On the raw materials market, however, attention is focused on coal prices which have been rising rapidly since yesterday, breaking new records. This is probably the reason for the good performance of energy and mining companies on the Warsaw Stock Exchange yesterday.
Will the EU put cryptocurrencies in order?
On the financial market we could observe a significant increase in the prices of cryptocurrencies. And this is both bitcoin and alticoins.
In a recent speech, Christine Lagarde, the head of the European Central Bank, mentioned that the cryptocurrency market in Europe should be regulated as soon as possible so that the money of oligarchs is not held in them, avoiding sanctions. The Binance exchange yesterday refused to suspend accounts of Russian customers.
Daniel Kostecki, Director of the Polish branch of Conotoxia Ltd. (Forex service)
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