Markets have been on edge these past few weeks due to fears of a possible escalation of the Russian-Ukraine conflict into a war. Monday morning started positively with news that President Biden has agreed to a diplomatic meeting with Putin as long as there is no Ukraine invasion prior the diplomatic effort, but the situation quickly changed after the Russian president recognized the independence of Donetsk and Luhansk from Ukraine.
The euro zone Markit Composite PMI preliminary release for February reached a five-month high of 55.8 from 52.3 in January. The index signalled a growth especially in the services sector as covid restrictions have been eased.
Today CPI published by Eurostat for the month of January has been confirmed at 5.1% (still above the Governing Council’s target of 2%). Supply constraints and high energy prices are the main drivers. Inflation excluding energy stood at 2.5%. ECB could strengthen its hawkish stance after this data.