The EU has its own tricks, and the sanctions against Russia are different

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The EU has yet to agree on energy sanctions against Russia. Some EU countries, including Poland and Lithuania, want a complete ban on Russian oil and gas, while Germany and Hungary oppose an immediate oil embargo. The Federal Reserve is raising interest rates, potentially slowing the U.S. economy, and oil prices are falling again. But the worsening crisis in Ukraine is likely to increase EU sanctions on Russian oil, and prices are likely to rise again at a later date. Russia is Europe's largest energy supplier, providing 26% of EU oil imports in 2020.

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Oil exports from Russian ports to EU member states have risen to an average of 1.6 million bpd so far in April, compared with an average of 1.3 million bpd in March, according to tanker tracker TankerTrackers. Data from Kpler, another commodity data analytics firm, showed a similar trend. According to the Wall Street Journal, more and more oil is being sent from Russian ports. European countries desperately need oil to keep their economies afloat and prevent fuel prices from pushing up inflation data that has already topped all-time highs. But Western energy companies and oil middlemen want to "deal quietly" and avoid sanctions and criticism.

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Macron was re-elected as French president, but this result can only give the euro a temporary respite. Because this result is conducive to the further integration of the EU in the future, it will promote the EU to finance a joint fiscal stimulus plan to alleviate the negative impact of the Russian-Ukrainian conflict on the European economy. French President Emmanuel Macron may have the guts to continue pushing for a stronger response to Russia. One of the main downside risks to the European economy in the coming months is tougher measures, including restrictions on Russian energy exports to the EU. So for the euro, Macron's re-election by itself is clearly not enough to reverse the current bearish trend.

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Sberbank announced on April 25 that since the end of February, the bank's retail customers' demand for renminbi has increased by more than 10 times. The renminbi is said to be the third most popular foreign currency to buy in the bank's app, after the US dollar and the euro. According to reports, as of April 18 this year, more than 130,000 customers of the bank bought RMB, and 60% of customers chose RMB as a means of diversifying their savings. However, Sberbank said that due to the temporary control measures imposed by the Central Bank of Russia, the bank has suspended RMB cash withdrawals until September 9, 2022.

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Spot gold fell to a nearly one-month low of $1,902.70 an ounce, as the prospect of an accelerated rate hike by the Federal Reserve boosted the U.S. dollar, the U.S. index continued its gains in the previous two trading days and climbed to a two-year high of 101.75. But the Fed's increasingly hawkish impact on U.S. stocks is bullish for gold. In addition, gold is still benefiting from safe-haven buying triggered by the Ukraine crisis.

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The main concern of market participants is that the Fed's continuous strengthening of its hawkish remarks, coupled with geopolitical uncertainty, may dampen market confidence, and the Fed may not be able to balance inflation and growth. U.S. stocks could face a painful situation in the coming weeks. The U.S. S&P 500 has lost 5.7% so far in April and is on track for its biggest monthly drop since March 2020 after a sharp drop last week. That’s when the Covid-19 pandemic started to break out across the world and hit the stock market hard.

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Bosera Fund believes that today's A shares fell again, mainly for the following reasons: First, due to the impact of the Federal Reserve's increased interest rate hike expectations, US stocks fell sharply last Friday, and the downturn spread to A shares; second, the epidemic spread across the country. The rebound in many places, especially the epidemic in the Yangtze River Delta, which has lasted for a long time, has suppressed production, logistics, and consumption. The market is worried about the recovery of the economy, and risk appetite has fallen further. In the short term, investor sentiment will remain subdued by these factors. In the medium and long term, the opportunities of A-shares will outweigh the risks, so there is no need to be too pessimistic about the performance of the market outlook. Some industries have experienced a correction in the early stage, and the mid- and long-term allocation value has further emerged, so they can be properly paid attention to, such as the upstream sector of new energy vehicles, photovoltaics, etc. .

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Federal Reserve Chairman Jerome Powell said at the Fed's May policy meeting that raising interest rates by 0.5 percentage points was a strategy "on the table". Given that inflation is about three times the Fed's 2% target, the pace of action is appropriate. Money markets now expect the Fed to raise rates by 50 basis points at each of the next three consecutive policy meetings, bringing the cumulative rate hike this year to 275 basis points. The final rate target for this cycle of rate hikes is expected to reach or exceed 3.5% next summer.