He cannot be serious

Since the end of last week, the market has begun to take the possibility of Russia invading Ukraine more seriously. Investors are still uncertain about what to do about it, but they are in general agreement that it is worth stocking up with energy and safe-haven assets and leaning away from over-valued equities.

Still, taking it more seriously does not yet mean taking it very seriously. The JPY and CHF added an average of 0.2% on Monday—a third of a Swiss cent—while the EUR and SEK lost 0.25%—a fifth of a euro cent. Sterling was once again unchanged on average; it is up by 0.6% on the week and the month.

Ukraine President Volodymyr Zelensky sought to ease tensions yesterday by brushing off Western suggestions that the Russian invasion could come this Wednesday. Unfortunately Mr Zelensky, who originally found fame playing a comedic Ukrainian president on TV, failed to make clear that his broadcast was supposed to be taken as sarcasm. This fed the apprehension rather than alleviating it and stock markets around Europe moved lower.

She buys her own groceries

At the end of last week, European Central Bank President Christine Lagarde reassured an interviewer that she buys her own groceries and is well aware of rising prices. On Monday, she told the same story a slightly different way to the European Parliament.

The occasion was a debate on the ECB annual report. During her opening presentation, Ms Lagarde was keen to insist on the need for “flexibility and optionality”. She also stressed that there will be no rush to remove stimulus and tighten monetary policy. The president appeared to be downplaying the comments made after the last Governing Council meeting, which had been taken as representing a more hawkish stance in Frankfurt.

This morning, the Reserve Bank of Australia published the minutes of its February policy meeting. They contained nothing new or shocking, confirming the end of asset purchases and speaking of patience in modifying monetary policy. For some, that patience risks the bank being “rushed into a short, sharp tightening cycle”. At least one analyst believes the first rate hike will come in June, a couple of months sooner than previously thought.

Prices 5.4%, Wages 4.3%

This morning’s UK jobs data were mostly in line with analysts’ predictions. Unemployment was steady at 4.1% and employment edged up to 75.5%. Unfortunately, and also as expected, pay rises failed to keep up with rising prices in the shops.

Basic pay went up by 3.7% in the year to December, while average earnings including bonuses rose by 4.3%. However, inflation is leaving remuneration in its dust. The data due out early tomorrow morning are expected to put headline consumer price index inflation at 5.4% and the old-fashioned retail price index inflation at 8.4%. It will be interesting to see if the Bank of England Governor continues to discourage workers from seeking pay increases that don’t leave them worse off over time.

Other data this morning cover Spanish inflation (6.2% according to the EU standardised HICP measure) as well as Eurozone employment, GDP and trade. ZEW reports on institutional investor sentiment in the Eurozone and Germany. After lunch comes Canadian housing starts and US producer prices, together with the New York Fed’s manufacturing index. Chinese inflation comes out tonight, and the UK inflation figures appear an hour ahead of London’s opening.