Surging commodity prices dominated the headlines last week, as we saw the price of a litre of petrol here in Ireland move above €2 for the first time ever. Globally over the last two weeks the price of oil is up 30%, corn up over 10%, and wheat up nearly 20%. The London Metal Exchange has suspended Nickel trading and cancelled over $4bn worth of trades as the price doubled last week.


The invasion of Ukraine, when viewed purely through the lens of investment markets, may not have a long lasting effect in itself.  History tells us that the reaction of risk assets to geopolitical events can be more understated than expected. However, as outlined above, Russia’s role as a commodity producer may have a more fundamental influence on monetary policy and the ensuing path of global interest rates. The ECB met last week with rate hikes forecast from the BoE and Federal Reserve this week (more info below). The language will be closely watched as central bankers must balance commodity fuelled inflation with what is still a fragile post pandemic economic recovery.


Finally, the 2022 S&P 500 return in dollar terms now takes its place amongst the top five worst starts to a year ever, with 2009 and 2020 as notable recent constituents on the list. However, for those who remember the final calendar year returns of the above two years, past performance is indeed not a reliable guide to future performance.