Watson’s Weekly 02-04-2022

This is an amalgamation of the “best bits” of the daily weekday newsletter/blog woven together to form a concise and coherent view on the things that matter in the commercial and economic news of the week. 

THE DAY IN BRACKETS REFERS TO THE EDITION WHERE THE STORY APPEARED IN WATSON’S DAILY. Clicking on the day will take you to the appropriate edition of Watson’s Daily.


This week saw China continuing to tread a delicate path between neutrality towards Russia on the one hand and not annoying the West enough to incur sanctions on the other.

  • China is having Covid problems (Tuesday) and its patchy vaccine programme has left around half of its elderly at risk. Things got so bad that they closed down Shanghai (Tuesday) and later decided to extend the lockdown (Friday). It’s thought that China’s strict lockdown is costing the economy up to £35bn a month (Wednesday) but could end up way more if other cities like Beijing, Tianjin and Shenzhen go down the same route. Chinese and Russian foreign ministers had their first meeting since war broke out (Thursday) as China continues to keep a foot on either side of the divide.
  • Germany announced inflation figures that were the highest for 40 years (Thursday) at 7.3%, powered largely by higher energy prices. With Putin digging his heels in about getting paid in roubles (Friday) Austria and Germany are talking about the possibility of gas rationing (Thursday) in the event of a complete cut-off from Russia.
  • Elsewhere, Spain announced a €16bn plan to mitigate damage to Spain’s economy (Wednesday) and Australia delivered a giveaway budget (Wednesday) ahead of the federal election in May.

There was a lot of talk about oil and gas this week…

  • The US made a big thing about releasing some of its emergency stash of oil (Friday), adding that it would impose fines on domestic oil companies that don’t increase drilling. At the end of the day, this isn’t really going to touch the sides and will make much less difference to oil supply than OPEC turning on the taps – something they aren’t minded to do at the moment.
  • The UK crossed some previous red lines as the North Sea Transition Authority gave Cuadrilla another year to come up with fracking proposals (Friday), something that would previously have been unheard of! Continuing on that theme, Shell got a two-year licence extension for developing the controversial Cambo oilfield (Thursday) off the Shetland Islands, something the government had been dragging its feet on, particularly following last year’s COP26.
  • In LNG developments, although Germany managed to negotiate more imports from non-Russian sources (specifically Qatar and the US) it seems that Germany in particular doesn’t have the facilities to receive it (Tuesday) and it doesn’t make up for the amount it gets currently from Russia (Wednesday).

RENEWABLE ENERGY sources also featured a lot as everyone scrabbled around to find non-Russian supplies:

  • Although solar and wind costs have risen since Russia invaded Ukraine (Monday) the government is still keen to push solar power (Wednesday) and triple the amount of solar capacity (Tuesday) and while BoJo is keen on wind power, he relented on onshore plans (Thursday) following resistance from MPs whose constituencies would be affected.


  • Rising lithium prices are causing increasing concerns that EVs will get even more expensive than they already are (Wednesday) but Australia made a breakthrough with a Chinese JV partner (Friday) taking a big leap forward into producing Australia’s first battery-ready lithium hydroxide. Australia exports a lot of lithium but, thus far, hasn’t refined it.


  • Consumers around the world are facing real challenges at the moment. Egypt is having a nightmare (Tuesday) because it is the world’s biggest importer of wheat (most of which comes from Russia and Ukraine) and it will no doubt have to rely heavily on money from the IMF to tide it over during this difficult period. In the UK, the latest data from Kantar said that grocery inflation last month saw its biggest monthly increase since April 2012 (Wednesday), which is just another thing to add to the list of things that are going up in price. Energy bills for 20m households went up by 54% (Friday), beer and clothing prices will be going up (Monday) due to expected or actual barley and cotton shortages and it seems that we are increasingly financing our spending on credit cards (Wednesday) as credit card borrowing showed its biggest monthly rate increase since records began in 1993! Almost 2/3 of firms expect to raise prices over the next three months (Friday) and the Bank of England warned of a major hit to economic growth (Tuesday). Residential property prices are rising faster than inflation currently (Wednesday) and mortgage costs are expected to increase (Thursday) because cheap mortgage deals are being withdrawn in anticipation of more interest rate rises. “Staycation” spending is a rare bright spot (Tuesday) and moneyed consumers are buying posh Mulberry handbags (Wednesday).
  • Retailers got feisty this week. A class action lawsuit is being brought by 100,000 British businesses (Thursday) against Visa and Mastercard for charging eye-watering fees on corporate credit cards. Asda also faces a legal battle with Waitrose (Tuesday) for giving its new cheapo range a similar name to Waitrose’s. Elsewhere, Boots reported good sales (Friday), which is good news because its parent is seeking out a new owner for the UK business and H&M saw sales growth momentum slow (Friday) as result of the war. Russia was the company’s fifth biggest market pre-invasion.


  • Amazon drivers are agitating for change (Monday) as their finances are being squeezed and the UK government has basically lost the battle with P&O (Thursday) as most of the P&O crew took the settlement offered by the company in the first place and its proposals to force ferry operators to pay at least the minimum wage have failed. The whole debacle has, however, highlighted how low pay is rife in the seafaring industry, which may mean that pay practices at P&O’s rivals come under the spotlight. Sainsbury’s is under pressure to pay the living wage (Monday) but this comes at a sensitive time as the grocer is doing a bit of a reshuffle. The number of job ads seems to be fading (Friday), presumably because of the Russia/Ukraine war – talking of which, truckmaker MAN has furloughed 11,000 staff in Russia (Thursday) because of parts shortages.


  • Macquarie and British Columbia Investment bought a 60% stake in the National Grid’s gas network (Monday), which is especially interesting as it is also teaming up with private equity firm KKR to buy the UK’s biggest electricity distributor UK Power Networks.
  • Royal Bank of Canada bought UK wealth manager Brewin Dolphin (Friday), only months after America’s Raymond James bought UK wealth manager and broker Charles Stanley. Consolidation in this sector continues…
  • Yandex, aka “Russia’s Google”, signalled its intention to sell its UK rapid grocery delivery business (Friday). It only launched in October last year but it has 1.4m users and four London warehouses.
  • Apollo walked away from buying Pearson (Thursday) after its latest bid for the educational publisher was rejected. It can’t put in another bid for six months unless another bidder comes along or if Pearson invites it to.


  • In TRAVEL, Tui said it would repay Covid state aid as bookings were back to pre-Covid levels (Thursday) and Ryanair is bullish about the coming summer (Friday), but I don’t share their optimism! I really think that inflation – and shocking household bills in particular – are going to give cause for people to cancel/postpone.
  • In AVIATION, aircraft leasing company Avalon warned of impending big losses because of the Russia/Ukraine war (Wednesday) and then the world’s biggest lessor, AerCap, put in a massive insurance claim (Thursday) for the planes that it has “lost”.
  • In TECH, Chinese telecoms giant Huawei posted weaker sales but stronger profits over 2021 (Tuesday) as US sanctions kicked in and it is now facing a tricky dilemma about Russia (Thursday). Should it take advantage of western companies leaving but risk even more sanctions for effectively supporting Russia?
  • In INDIVIDUAL COMPANY NEWS, the government sold down some of the stake it took in NatWest during the financial crisis (Tuesday), but at a loss, while Carlsberg and Heineken face material hits to their business (Tuesday) as they look to ditch their Russian businesses.


  • Watson’s Yearly updates 2021/22: there have been updates in the G20 statistics (some inflation and unemployment rate changes) as well as country updates. Please click HERE to see Watson’s Yearly and the changes. Changes have been highlighted in this purple colour 👍 You will be able to see how themes and countries develop throughout the year by reading this document! 


My favourite “alternative” story this week was Nike takes over Cross Shinjuku Vision’s giant screen with 3D sneakers… and cat paws (SoraNews24, Shannon), which is absolutely amazing, don’t you think?!?