Markets calm as troops move in

<p>Kia ora,</p><p>Welcome to Thursday’s Economy Watch where we follow the economic events and trends that affect Aotearoa/New Zealand.</p><p>I'm David Chaston and this is the International edition from Interest.co.nz.</p><p>Today we lead with news markets are handling the Ukraine situation calmly, so far.</p><p>As Ukraine <a href="https://www.president.gov.ua/en/news/rnbo-pid-golovuvannyam-volodimira-zelenskogo-uhvalila-rishen-73073" target="_blank"><strong>braces for open war</strong></a> as Russian forces move deeper into their country, the rest of the world is bracing for the economic impacts however, which is including aggressive <a href="https://www.reuters.com/world/europe/ukrainian-government-foreign-ministry-parliament-websites-down-2022-02-23/" target="_blank"><strong>cyber war</strong></a>. RT is central to their global disinformation push. Spill-over will no doubt affect New Zealand at some point.</p><p>EU and US sanctions are hitting the value of the <a href="https://tradingeconomics.com/russia/currency" target="_blank"><strong>ruble</strong></a> (it’s now at an all-time low) and the yield on <a href="https://tradingeconomics.com/russia/government-bond-yield" target="_blank"><strong>Russian bonds</strong></a> (with the 10yr now approaching 11%). Their 9% inflation rate is expected to rise. Even though current sanctions only formally hit Putin loyalists (the oligarchs), they will still have a tough impact on ordinary Russians. And there will be loud echoes in EU and other global financial markets too.</p><p>Meanwhile in the US, <a href="https://tradingeconomics.com/united-states/redbook-index" target="_blank"><strong>retail sales growth</strong></a> continued is strong recent expansion last week, still rising far faster than CPI, so it is still recording 'real' volume gains.</p><p><a href="https://www.mba.org/2022-press-releases/february/mortgage-applications-decrease-in-latest-mba-weekly-survey-x288963" target="_blank"><strong>Mortgage applications fell</strong></a> sharply last week, down to their lo