ECB Urges Haste on Crypto Regulation

MARKET MOVERS

• Emerging market debt funds drop as Russia’s attack ripples to different corners of financial markets. Many emerging markets' fixed-income funds are getting hit hard this week due to their ownership of Russian debt, which has been targeted by the U.S. and Europe’s sanctions. Many ETFs invest in Russian bonds and have suffered losses due to the escalating geopolitical tensions. Read more here.
  
  
• The global market for grains is disrupted by the Ukraine conflict. Wheat and other grain prices have soared since the Russian invasion of Ukraine. The disruption of grain exports from Ukraine and Russia through the Black Sea will probably lead to physical shortages of food in the world, particularly for countries dependent on those supplies. If the war is prolonged, it will impact millions of people reliant on these grain exports.
  
  
• Global air travel is disrupted by the Russian invasion of Ukraine. Airlines have had to reroute planes to avoid Ukraine and parts of Russia. Delta cancels a code-sharing deal with Russian flag carrier Aeroflot as London and Moscow exchange bans on each other’s air traffic. Sharper Western sanctions on Russia and a widening conflict in Ukraine threaten to cut off more Russian airspace.
  
  
• Pending home sales dip amid anticipated 'retreat' in demand. The number of homes that went pending in January, a leading indicator of future sales, fell 9.5% year over year, according to data released Friday by the National Association of Realtors. Given the situation in the market — mortgages, home costs, and inventory — it would not be surprising to see a retreat in housing demand.

• Defense stocks got rewarded on prospects for more military spending. Russia's move sparked a surge in the stock prices of U.S. defense stocks. It's all but certain that defense budgets in NATO nations will rise, meaning more business for defense companies Lockheed Martin and GE as they sell fighter jets to European militaries, and fighter jet engines to power them. Read more here.

WHAT TO WATCH

• ECB urges haste on Crypto regulation in wake of Russian sanctions. The European Parliament is working on the legislation known as Markets in Crypto Assets (MiCA), and if approved lawmakers still need to agree on a common position with members states in the coming months. The regulation might help prevent Russia from evading sanctions after invading Ukraine. Read more here.
  
  
• The Russian attack on Ukraine could dent chip-maker supply lines. It could disrupt global supply chains for neon gas and the metal palladium, both of which are used in the manufacture of semiconductors, analysts said. Russia and Ukraine produce 40% to 50% of semiconductor-grade neon. Largely derived from steel manufacturing, neon gas is used in lasers that help in the design of semiconductors.
  
  
• Energy is going to be so critical in the next century. If automation is the future of manufacturing, then electricity and energy end up being the biggest cost driver for those systems. If everything's on parity and everyone's got the same automation systems, whoever's got the cheapest energy wins. It will be critical for any country to have energy independence to maintain its footing in the world. Source(27:13)
  
  
• Auction for the right to build wind farms off New York and New Jersey raises a record $4.37 billion. The auction by the U.S. Bureau of Ocean Energy Management is the first offshore wind lease sale under President Joe Biden. Once the sites are fully developed, the sale of more than 488,000 acres is expected to produce up to 7 gigawatts of clean energy, enough to power nearly 2 million homes.

• U.S. bets on a faster-charging battery in the race to catch energy rivals. It is pinning its hopes on companies such as Ion Storage Systems, a next-generation battery company with a $574,275 federal grant. The government and private investors have poured cash into battery startups to catch up to the Chinese, Japanese, and South Korean companies that dominate battery manufacturing. Read more here.