A fire broke out at Europe’s largest nuclear power plant, but there were no reports of radiation leaks. The euro and European stock market fell on the prospect that existing sanctions loopholes will be closed to strangle Russian commodity exports. Commodity prices, meanwhile, are on track for their biggest weekly rise since the 1960s along with gains in wheat and nickel prices. In addition, the release of the monthly U.S. jobs report is expected to support the Federal Reserve’s course of raising interest rates by 25 basis points at the end of the month. Here’s what you need to know about the financial market on Friday, March 4.

1. Russian troops take control of Europe’s largest nuclear power plant

Russian troops have taken control of Europe’s largest nuclear power plant near Zaporizhzhya in eastern Ukraine. A fire that broke out in a building away from the nuclear reactors has been brought under control. The reactors were not damaged.

Concerns about possible radiation leakage, prompted by memories of the Chernobyl disaster in northern Ukraine in the late Soviet period, proved unfounded. The reactors are built quite differently and have been retrofitted with a massive containment vessel that protects them from most likely scenarios.

Russia’s Defense Ministry blamed the shelling on a squad of Ukrainian provocateurs.

On Thursday, Russia and China voted against an IAEA resolution regarding nuclear facilities in Ukraine.

2. Euro hits 22-month low as sanctions fears intensify

The euro fell below $1.10 for the first time since May 2020 as the course of Russia’s military operation in Ukraine raised the likelihood of tougher Western sanctions that would disproportionately hit the eurozone economy.

European stock indexes also continued their slide, with Italy’s FTSE MIB down 11% this week and Germany’s DAX down 9.3%.

On Thursday, an aide to French President Emmanuel Macron told reporters to “fear the worst” after Vladimir Putin reiterated his determination to see the military operation through to the end in a phone call with Macron.

The number of senior European politicians willing to agree to a complete ban on Russian energy purchases, which were initially excluded from the sanctions package passed last week, is growing by the day.

3. Payrolls show continued recovery in the U.S. labor market


The US economy is expected to have added another 400,000 jobs in the month to mid-February and continues to rapidly replace jobs lost during the pandemic. The Labor Department will release its monthly report at 08:30 am ET (13:30 GMT).

That marks a slight slowdown from 478k in January, but still an impressive figure given the disruptions in the retail, travel and hospitality industries caused by the wave of the Omicron strain of the coronavirus.

It will also reinforce expectations for a 25 basis point increase in the federal funds rate at the Federal Reserve’s Monetary Policy Committee meeting in two weeks.

The unemployment rate is expected to have fallen to 3.9% from 4.2%, but analysts will also keep an eye on developments in the labor force participation rate, which remains more than a full percentage point below the pre-pandemic level of 63.4%.

4- U.S. market to open lower

U.S. stock indexes will open slightly lower later amid news from Ukraine and Russia. The Russian Duma earlier approved a law that would penalize up to 15 years in prison for spreading inaccurate news about military action in Ukraine.

By 06:20 am ET (11:20 am GMT), the Dow Jones futures were down 334 points, or 1.0%, marking the third weekly decline in the past 4 weeks. The S&P 500 futures were also down 1.0% and the Nasdaq 100 futures were down 0.9%.

Stocks that are likely to be in focus going forward are software company Splunk, which received a vote of confidence from Helman & Friedland in the form of a 7.5% stake purchase. Shares of Gap and Broadcom (NASDAQ:AVGO) also rose in the premarket after well-received quarterly updates on Thursday, while Costco (NASDAQ:COST) shares declined after warnings of container delays, higher labor and freight costs, and a chip shortage outweighed better-than-expected fiscal second-quarter results.

5. Commodities are having their best week since the 1960s

Commodities continue to post their biggest weekly gain since the 1960s as the prospect of tougher sanctions on Russian exports had buyers looking for alternatives.

By 06:25am ET (11:25am GMT), WTI crude futures were up 2.2% to $110.06 a barrel, while Brent was up 2.0% to $112.66 a barrel. While this is slightly below the peaks seen earlier in the week, it still shows a weekly increase of over 20%, which in the past has always resulted in demand destruction and slower economic growth.

Wheat prices also continue to rise, a day after an Estonian cargo ship sank in the Black Sea, hit by a mine. This has all but wiped out the chances of any ship getting insurance to enter and exit Black Sea ports in Russia and Ukraine. They account for nearly 30% of the world’s wheat exports.

Nickel futures hit $29,823 a ton on the London exchange, the highest since 2008, on the same fears about the availability of Russian supplies.