Ukraine dominates, but inflation still building

<p>Kia ora,</p><p>Welcome to Monday’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 all eyes are on Ukraine.</p><p>Although it might be the first day of Carnival in Brazil, it is the fourth day of <a href="https://graphics.reuters.com/UKRAINE-CRISIS/zdpxokdxzvx/" target="_blank"><strong>war in Ukraine</strong></a>, a pall that hangs over the world. Obviously events move fast in war, but the following are of note. Russian forces seem bogged down in the north but are having an easier time pushing in from the south even if progress isn't that fast there either. Ukrainian resistance is holding for now. What is especially impressive is how much resistance is coming from Russian-speaking populations near the Russian border, especially around Kharkiv which is just 25 kms from the border. Russian forces entered the city, but officials there now say they have been driven out.</p><p>Russia has released its <a href="https://www.afr.com/politics/federal/world-s-most-prolific-hacking-gang-threatens-ukrainian-allies-20220227-p5a00o" target="_blank"><strong>cyber hackers</strong></a> to go after "Russia's enemies'.</p><p>The EU has banned some key Russian financial institutions from the Swift payments network. It has also placed an airspace ban on all Russian aircraft.</p><p>After that, Russia put its nuclear forces on 'special alert'. It is not clear what motivated that - Swift or their forces getting bogged down - but it isn't a good sign.</p><p>The Russian Central Bank is struggling to keep up with a sudden rush in cash-note withdrawals from banks. <a href="https://tradingeconomics.com/russia/inflation-cpi" target="_blank"><strong>Already high</strong></a>, just in the past few days Russians have noticed further sharp price rises. The odds are high that a big rate hike is coming soon to support the ruble that fell to 90:USD, although it is off that low now.</p><p>Th