Since February, affected by the stronger inflation expectations in major developed economies, the international gold price once soared to US$1,970 per ounce. With the deterioration of the situation in Russia and Ukraine, the prices of commodity assets including energy, metals, agricultural products, etc. rose significantly.
As far as the current situation is concerned, the tension between Russia and Ukraine will continue to ferment, and the impact on commodity prices will be divided into two categories: safe-haven demand and supply shock. Related commodities will continue to maintain the current risk premium. JPMorgan Chase said that the adverse impact of the conflict between Russia and Ukraine on Asian credit markets will be indirectly reflected through rising energy prices and short-term risk aversion, and rising energy and commodity prices are unfavorable for Asian countries as a whole.
At present, Russia's copper, aluminum and nickel production accounts for about 5% of global output, and non-ferrous metal prices are also rising due to supply concerns. Aluminum and nickel reacted the most strongly. The prices of both aluminum and nickel rose sharply on Thursday, with the price of aluminum hitting a record high. Zhan Dapeng, an analyst at Everbright Futures, explained that first, aluminum and nickel prices rely more on the fundamentals of supply and demand, and second, Europe is strongly dependent on Russian aluminum and nickel. "The United States and Europe may introduce more severe sanctions against Russia in the future.
However, geopolitics can also generate risk aversion, which can also create instability in the global economy and affect global aggregate demand. The relatively quiet performance of copper may be a reflection of risk aversion.
It is reported that the Federal Reserve and the Bank of England have raised their interest rate hike expectations one after another due to inflation considerations. In the long run, tightening monetary policy earlier will achieve a better balance.
According to data from the Office for National Statistics, in January 2022, the UK furniture retail price (RPI) index reached a new high, with an increase of 14.1%, up from 12.5% in December. This is the fifth month in a row that it has exceeded 10%. Furniture has been the main factor behind rising inflation in the UK for the past two months. From January 2021 to January 2022, costs such as materials and fuel for UK furniture makers are maintained at high levels.
The furniture production index in January 2022 was 20%, and it is now five months in a row that the index has reached at least 20%. Ex-works prices for furniture manufactured in the UK for the domestic market rose by 5.2% in January 2022, matching the record recorded in December 2021. Monthly retail sales of furniture and lighting were £1.32bn in January 2022, up 51.3% from the same period in 2021, but down 7.7% from the pre-COVID 2019. Weekly retail sales for the full year of 2021 are up 14% from 2020 and remain the same as in 2019.
Considering that the price of timber is also affected by market demand and the impact of the epidemic, there are still variables in the future trend of timber prices, but the rising cost of raw materials, shipping, freight, and labor has sounded a "wake-up call" for the rise of timber.