Ukrainian War as a shock to finance markets

A possibility of cutting out Russian oil and gas imports has dramatically increased prices in the stratosphere. A barrel of gross oil type Brant cost just before the market opened on Monday (07.03) 139 dollars, this is the highest price rate since July 2008. Even gas trade prices in Europe have increased by 60 per cent to 350 euros, breaking Friday's record. (04.03). Prior to the Russian intervention in Ukraine, the price was below 80 euros.

But not only oil and gas are expensive. Even the price of palladium has reached a record $3440 for the ons of land pladium used for the catalysts, and Russia covers 38 per cent of the world's palladium production. Nickel temporarily increased by 30 per cent, nearly $38,000 per tonne, the highest price rate since mid - 2007. The Alumin, also needed in the auto industry, has for the first time reached more than $400 per tonne, copper also scored record prices of around $10,850 per tonne. After the end of the “a difficult week” even this week that has just begun will remain in memory, say German Commerzbank market analysts.

Fuel and heat will become more expensive

These rapid increases in early prices and concern over a further escalation of war led to the decline of stock courses in the stock exchange. After severe losses on Asian markets, even scholarships in Europe began the week with strong negatives. German stock index, DAX dropped by nearly five per cent, marking the value of 12,438 points. During Monday, however, there were some slight increases of temporary value in plus until the scholarship was closed. Eurostoxx trading took place, which fell by 3.7 percent in the first few minutes of the stock exchange, but then had a slight renewal of the course. Depositors are now turning to gold: the price of an ounce of land for the first time since the summer of 2020 has reached more than $2000, due to the actual weakening of the euro, the price of gold has increased as never before. “We are at the beginning of a new order of world economy”, so it explains the reactions of finance markets Robert Halver, the strategist of capital markets at Bader Bank.

In general, the economy in Germany and Europe will produce significantly less due to shortages and high prices. In addition to increasing energy costs, the desire for consumption will decline, experts note. Germany is strongly dependent on energy import and global trade.

The rising prices of raw materials will greatly accelerate inflation as well. Throughout the eurozone area for the entire year inflation could increase by five per cent, believes Christian Kahler, stock exchange strategy at BZ Bank. Thus the European Central Bank faces the dilemma: It is actually forced to preserve price stability. So will she decide at Thursday's meeting for political-monitory normalisation? This means fighting inflation, but would further weaken the economy by leading to recession. The situation, according to experts, is extremely threatening. European stock markets have lost 20 per cent since the beginning of the year. As long as there can be no sign of stability, the courses will be declining. /DW