https://www.theglobeandmail.com/business/article-chinese-refiners-tap-alternative-payments-to-keep-russian-oil-flowing/

Chinese refiners are paying for Russian crude oil using cash transfers to maintain imports from Russia’s Fast East, as banks shy away from financing the oil because of sanctions, sources with knowledge of the matter said.

Global oil prices have soared to their highest in a decade as banks halted financing Russian oil after the United States and other countries ramped up sanctions on Moscow following its invasion of Ukraine.

Spot crude premiums and freight rates also spiked, piling on buyers’ costs.

Several European and U.S. refiners have stopped buying Russian oil this week, even though Washington said Russian oil and gas are exempted from sanctions.

But Chinese buyers are looking to maintain purchases of ESPO Blend crude exported from Russia’s Far East Kozmino port using other payment methods as they cannot secure letters of credit from banks, trade sources said.

“For those done deals, payments are being sorted out with buyers doing Telegraphic Transfer as bank financing becomes very difficult,” said a Singapore-based Chinese trading executive.

Telegraphic transfer, equivalent to cash pre-payment, requires buyers to transfer funds to sellers up front, a challenge for some cash-strapped independent refiners with each Aframax tanker-sized cargo now costing more than $85 million, the sources said.

Some sellers are providing open credit, but this raises their risk exposure, they added.

Sources said the cash settlements still need to go through the SWIFT messaging system to Russian banks which are not on the U.S. sanction list, said two trading executives with knowledge of the situation.

ESPO blend is popular among China’s independent refiners because of its short voyage time from Russia, availability on a spot basis, and good fuel yield.

Russia is the world’s No. 2 crude exporter, with exports reaching 7.8 million barrels per day in December, the International Energy Agency said.

Last year China imported 575,000 barrels per day of ESPO shipped by tankers, some 6% of total Chinese crude oil imports, with the majority processed by independent refiners, according to tanker tracker Vortexa Analytics.

State refining major Sinopec is a key buyer and trader of seaborne ESPO.

Sinopec’s trading vehicle Unipec, which rivals Vitol as the world’s top oil trader, typically has large open credit lines with suppliers that allow the major to pay a month after a shipment is loaded.

Unipec has bought as many as eight ESPO cargoes for April loading, traders said.

Sinopec did not immediately comment on how the firm pays for its purchases.

One independent refiner who buys ESPO crude said the company can only use telegraphic transfer (TT) to pay for the oil, and that financing costs are now high because oil prices have surged and there is no longer a credit period for repayment.

“We can only use TT for now,” the buyer said. “Previously with LCs, we had a credit period of 30 days. But now we have to pay up front.”

“Refining margins are poor, too,” the source added.

With oil near $120 a barrel, allowing teapots to pay after oil is delivered magnifies risk exposure for a trading company.

Sellers may well ask refiners to provide cash or part of the cargo as collateral, traders said.

“Whichever way, we believe China’s ESPO influx will continue as teapots don’t have many other options, as prices of competing supplies like West African oil went sky-high,” said a second Singapore-based executive with an independent refiner.

Spot premiums of West African and Brazilian crude for May delivery jumped to $9-$10 a barrel above dated Brent this week in volatile trade, a buyer said.

Adding to refiners’ costs are surging freight rates, which have nearly doubled over the week to $900,000 per day for an Aframax tanker sailing from Russia’s Kozmino port to north China, the highest since May 2020, according to traders and Refinitiv data.

China separately buys 800,000 bpd of Russian oil via pipelines under a government-to-government deal between state energy giant CNPC and Russian oil major Rosneft. The pipeline flows remained unaffected, Chinese oil officials have said.

China has repeatedly voiced opposition to the sanctions, calling them ineffective and insisting it will maintain normal economic and trade exchanges with Russia.

https://www.cnbc.com/2022/03/04/russia-ukraine-latest-updates.html

Russian forces attacked Europe’s largest nuclear power plant in Ukraine early Friday morning, causing a fire to break out at an adjacent training facility.

Ukraine’s nuclear agency says Russian military forces have taken control of the facility in Zaporizhzhia, Ukraine.

The bombardment triggered international condemnation and U.K. Prime Minister Boris Johnson has said he will call for an emergency meeting of the United Nations Security Council to discuss the attack.

https://www.cnbc.com/2022/03/04/europe-markets-russia-attacks-ukraine-power-plant.html

The pan-European Stoxx 600 slid 0.8% in early trade, with autos dropping 2.7% to lead losses while utilities bucked the downward trend to add 0.8%.

A fire broke out at a training facility at Ukraine’s Zaporizhzhia nuclear power plant after an attack by Russian forces early Friday morning. Ukraine officials said the situation is now secure, while the U.S. Nuclear Incident Response Team has been activated.

International leaders have condemned the bombardment and U.K. Prime Minister Boris Johnson told Ukrainian President Volodymyr Zelenskyy that he would call for an emergency United Nations Security Council meeting to discuss the attack.

Russia has been ratcheting up its assault on its neighbor in recent days, shelling major cities and advancing toward the capital city of Kyiv. The invasion has drawn unprecedented economic sanctions from Western governments.

Markets in Asia-Pacific tumbled as investors continued to monitor the invasion, with Hong Kong’s Hang Seng index and Japan’s Nikkei 225 both falling more than 2% to lead losses.

U.S. stock futures also fell early Friday morning ahead of a key jobs report, but recouped some losses following the reassuring statements out of Kyiv.

Earnings before the bell on Friday came from Lufthansa, while economic data releases include February PMI (purchasing managers’ index) readings from the euro zone and the U.K.

In terms of individual share price movement, Spain’s Cellnex Telecom gained 5.6% to lead the Stoxx 600 after the British regulator approved its purchase of 6,000 mobile towers.

At the bottom of the European blue chip index, German energy company Uniper fell 8.3%.

https://www.theglobeandmail.com/business/article-bank-of-montreal-tops-quarterly-profit-expectations-on-strong-retail/

Crescent Point Energy Corp. CPG-T +0.32%increase reported a fourth-quarter profit of $121.6-million compared with a loss of $51.2-million a year ago, helped by higher oil and gas prices.

The Calgary-based company says the profit amounted to 21 cents per share for the quarter ended Dec. 31 compared with a loss of 10 cents per share in the last three months of 2020.

Oil and gas sales totalled $900.4-million, up from $447.8-million in the fourth quarter of 2020.

Crescent Point says production in the quarter averaged 130,407 barrels of oil equivalent per day, up from 111,217 a year earlier.

The company’s average selling price was $75.05 per barrel of oil equivalent, up from $43.76 in the fourth quarter of 2020.

On an adjusted basis, Crescent Point says its net earnings from operations totalled 27 cents per share, up from 16 cents a year earlier.

https://www.cnbc.com/2022/03/03/weekly-jobless-claims-.html

Jobless claims total 215,000, fewer than expected; productivity rises 6.6%

Initial claims for unemployment insurance totaled 215,000, the lowest tally since the beginning of the year and fewer than Wall Street estimates, the Labor Department said Thursday.

Economists surveyed by Dow Jones had been looking for first-time filings to come in at 225,000 for the week ended Feb. 26.

A separate report from the Bureau of Labor Statistics showed that nonfarm productivity rose 6.6% in the fourth quarter, slightly less than the estimate for 6.7%. However, unit labor costs rose 0.9%, well ahead of the expected 0.3%.

On jobless claims, last week’s total represented a decline of 18,000 from the previous week and was the lowest since Jan. 1.

Continuing claims, which run a week behind the headline number, edged higher to 1.48 million. However, the four-week moving average, which smooths out weekly volatility, moved down to 1.54 million, the lowest level since April 4, 1970.

The total of those receiving benefits under all programs fell further, dropping to 1.97 million, a decline of 62,625.

The jobless numbers come a day before the BLS’ closely watched nonfarm payrolls report. Wall Street is looking for a gain of 440,000 in February, following up the much stronger-than-expected 467,000 total in January.

Companies are still trying to fill nearly 11 million job openings at a time when the worker shortage has expanded to unprecedented levels. There are about 4.4 million more employment openings than there are unemployed workers looking for jobs.

Wages have surged in the current environment, with average hourly earnings up 5.7% in January, a level well above anything seen in the pre-pandemic environment, according to Labor Department data going back about 15 years.

Unit labor costs continued to increase in the last three months of 2021, though at a lower pace than the previous quarter due in large part to the jump in productivity. A 7.5% rise in hourly compensation was largely offset by the 6.6% productivity rise. For the full year, unit labor costs were up 3.6%, down from the 4.3% gain in 2020.

Federal Reserve policymakers are about to tackle the inflation issue with an expected series of rate increases.

Fed Chairman Jerome Powell on Wednesday called the labor market “extremely tight” and said he expects the first rate hike to come at the central bank’s policymaking meeting later this month.

Oil jumps, Brent above $116 per barrel as supply issues persist

https://www.cnbc.com/2022/03/03/oil-markets-russia-sanctions-russia-ukraine-invasion-global-supply.html

Oil prices extended their rally on Thursday, with Brent rising above $116 a barrel, as trade disruption and shipping issues from Russian sanctions over the Ukraine crisis sparked supply worries while U.S. crude stocks fell to multi-year lows.

The Organization of the Petroleum Exporting Countries and their allies including Russia have decided to maintain an increase in output by 400,000 barrels per day in March despite the price surge, ignoring the Ukraine crisis during their talks and snubbing calls from consumers for more crude.

Brent crude futures rallied to $116.83 a barrel, the highest since August 2013. The contract was at $116.60 a barrel, up $3.67 by 0112 GMT.

U.S. West Texas Intermediate crude was at $113.01 a barrel, up $2.41 after touching a fresh 11-year high of $113.31 a barrel.

“The White House ratcheted up pressure on Russia with the announcement that it will apply export controls targeting Russian oil refining,” ANZ analysts said in a note.

“This raises concerns that Russian oil supplies will continue to hit constraints.”

The market was reacting to the latest round of sanctions by Washington on Russia’s oil refining sector that raised concerns that Russian oil and gas exports could be targeted next.

So far, it has stopped short of targeting Russia’s oil and gas exports as the Biden administration weighs the impacts on global oil markets and U.S. energy prices.

Russia is the world’s No. 3 oil producer and the largest exporter of oil to global markets, according to the International Energy Agency. Russian crude and oil products exports reached 7.8 million barrels per day in December, the agency said.

Meanwhile, U.S. oil inventories continued to decline. The key Cushing, Oklahoma crude hub’s tanks were at their lowest since 2018, while U.S. strategic reserves dropped to a near 20-year low — and that was before another release announced by the White House on Tuesday in tandem with other industrialized nations.

Fed Chair Powell notes ‘highly uncertain’ Ukraine impact, but says rate hikes are still coming

Federal Reserve Chairman Jerome Powell still sees interest rate hikes coming, but noted Wednesday that the Russia-Ukraine war has injected uncertainty into the outlook.

Powell said he sees a series of quarter-percentage-point increases coming, though he left open the possibility of moving more aggressively should inflation persist.

In remarks prepared for dual appearances this week before House and Senate committees in Congress, the central bank chief acknowledged the “tremendous hardship” the Russian invasion of Ukraine is causing.

“The implications for the U.S. economy are highly uncertain, and we will be monitoring the situation closely,” Powell said.

“The near-term effects on the U.S. economy of the invasion of Ukraine, the ongoing war, the sanctions, and of events to come, remain highly uncertain,” he added. “Making appropriate monetary policy in this environment requires a recognition that the economy evolves in unexpected ways. We will need to be nimble in responding to incoming data and the evolving outlook.”

Later, he said the Fed wants to get inflation under control, but “the bottom line is that we will proceed but we will proceed carefully as we learn more about the implications of the Ukraine war on the economy.”

The observations come amid 40-year highs for inflation in the U.S., complicated by a Ukraine war that has driven oil prices to around their highest levels in a decade. Consumer prices increased 7.5% from a year ago in January, and the Fed’s preferred inflation gauge showed its strongest 12-month gain since 1983.

Powell and his fellow policymakers have been indicating for weeks that they plan to start raising benchmark interest rates to tackle inflation. He reiterated the stance Wednesday that the process will involve “interest rate increases,” along with indications that the Fed eventually will start reducing its bond holdings.

“We will use our policy tools as appropriate to prevent higher inflation from becoming entrenched while promoting a sustainable expansion and a strong labor market,” he said. “We have phased out our net asset purchases. With inflation well above 2 percent and a strong labor market, we expect it will be appropriate to raise the target range for the federal funds rate at our meeting later this month.”

Powell said the likely path for rate hikes will be increments of a quarter percentage point, though he said he would be open to more aggressive moves if inflation gets worse.

“We’re going to avoid adding uncertainty to what is already an extraordinarily challenging and uncertain moment,” he said under questioning from House Financial Services Committee members. “To the extent that inflation comes in higher or is more persistently high than that, we would be prepared to move more aggressively by raising the federal funds rate by more than 25 basis points at a meeting or meetings.”

Inflation still expected to fall

The Fed will start cutting the size of its asset holdings after rate hikes have begun, he added.

Since the beginning of the Covid pandemic, the Fed has been buying Treasurys and mortgage-backed securities at the fastest pace ever, driving the total holdings on the central bank balance sheet to nearly $9 trillion.

Powell said the reduction will be conducted “in a predictable manner,” largely through allowing some proceeds from the bonds to roll off each month rather than reinvesting them.

On the economy, the chairman said he still expects inflation to decelerate through the year as supply chain issues are resolved. He called the labor market “extremely tight” and noted strong wage gains, particularly for lower earners and minorities.

“We understand that high inflation imposes significant hardship, especially on those least able to meet the higher costs of essentials like food, housing, and transportation,” he said. “We know that the best thing we can do to support a strong labor market is to promote a long expansion, and that is only possible in an environment of price stability.”

Markets have fully priced in a rate increase at the March 15-16 meeting but have decreased expectations for the rest of the year since the Ukraine war began, according to CME group data. Traders are now pricing in five quarter-percentage-point increases that would take the benchmark federal funds rate from its current range of 0%-0.25% to 1.25%-1.5%.

Canadian Companies with Russia ties

https://www.theglobeandmail.com/business/article-canadian-companies-with-russian-operations-stay-put-as-more/

As the list of international companies pulling out of Russia grows longer by the day, Canadian corporations doing business there are grappling with difficult decisions on whether to cut ties with the country outright or stick it out and bear the reputational and operational risk that could follow.

While Canadian companies such as Kinross Gold Corp. K-T +3.93%increase, McCain Foods Ltd. and Canada Goose GOOS-T +3.11%increase are distancing themselves from business in Russia or suspending operations outright in the country, other corporate pillars appear to be pushing on for now, including auto-parts maker Magna International Inc. and convenience store giant Alimentation Couche-Tard Inc. ATD-T +0.49%increase Several smaller companies also sell into the country, including Ski-Doo maker BRP Inc. and label manufacturer CCL Industries Inc.

For all of them, the world has changed with Russia’s invasion of Ukraine. Canada and its Group of Seven allies have condemned what they call an unprovoked attack and slapped Russia with sanctions, including prohibiting transactions with Russia’s central bank. Western leaders have also moved to cut several of Russia’s largest banks off from the international financial system by excluding them from SWIFT, the messaging network that facilitates most global money transfers.

Foreign-based multinationals are increasingly shunning the country. Energy giant Exxon Mobil Corp. said it would exit Russia, while aircraft maker Boeing Co. suspended maintenance and technical support for Russian airlines. Rival Airbus SE stopped sending spare parts.

Auto maker Ford Motor Co. suspended operations in Russia, and Apple Inc. halted sales of iPhones and other products while condemning Russia’s invasion of Ukraine. International shippers, such as Maersk, Hapag-Lloyd and MSC, have suspended bookings to and from Russia, as the country becomes increasingly shut out of world commerce.

All of that is forcing Canadian companies into a quick rethink of their commitment to Russia. If they stay, they risk being on the wrong side of the moral line their own government has drawn in this conflict. They might also have trouble supporting their Russian operations given the bank controls or difficulties finding supplies to feed operations. But pulling out also comes with cost.

“Truthfully, it’s hard to make the case for staying in Russia right now,” said Yan Cimon, a specialist in international business and strategy at Laval University’s department of management. “Those companies who want to stay in Russia, or could benefit from staying, will find it really hard to take a break and assess the situation and try to put the decision off.”

Russian businessman resigns from board of Winnipeg-based Buhler Industries

Kinross Gold suspending Russian mining operations amid Ukraine invasion

Perhaps no Canadian company has more at stake in the current conflict than Magna. The Aurora, Ont.-based car-parts maker has six manufacturing facilities and roughly 2,500 employees in Russia. The company’s 2020 annual report said it had $120-million in fixed assets in Russia and $345-million in sales from the country, about 1 per cent of the company’s global total.

Magna said the Russian plants make body, chassis, seating and exterior sections of vehicles, but did not specify which car company the parts are for. Magna spokeswoman Louise Colledge said Tuesday the plants are still running and Magna is monitoring the “very dynamic” situation.

“We are liaising with our customers and suppliers on a daily basis in order to review individual programs – our focus is to maintain business continuity,” Ms. Colledge said in an e-mail.

Joseph McCabe, president of AutoForecast Solutions LLC, said all foreign manufacturers with a Russian presence will be affected by this conflict. He said he has no firm confirmation on how severely Magna’s operations will be affected, but expected them to be evaluating temporary and permanent changes to their supply chains. “This action by Russia has put them under a global lens with companies now forced to consider if a full extraction from the jurisdiction is warranted,” he said.

At one time, Russia was seen as a breakthrough market for Magna. Russian oligarch Oleg Deripaska bought US$1.54-billion in shares of the company in 2007 and planned to run it with founder Frank Stronach. Mr. Stronach told shareholders at the time that before the investment, he sought and received a meeting with Russian President Vladimir Putin to get his endorsement of the deal. Mr. Deripaska later sold his shares during the financial crisis in 2008.

Mr. Deripaska was placed on a U.S. sanctions list in 2018 for his ties to the Kremlin. However, he is one of the few oligarchs to publicly break ranks with Mr. Putin over the invasion of Ukraine. On Sunday, Mr. Deripaska released a statement on the Telegram messaging app urging an end to the bloodshed.

Earlier this week, Russia’s central bank introduced new capital controls that required companies operating in the country to exchange 80 per cent of their foreign earnings into rubles, to help prop up the Russian currency. Magna did not respond to questions about whether they were affected by the orders.

Some companies have already pressed pause on their Russian business.

Toronto-based miner Kinross Gold Corp., which has operated in Russia for more than 25 years, said late Wednesday it is suspending operations at its Kupol mine as well as all activities at its Udinsk development project. Kupol, located in a remote area of Russia’s far east, is the gold miner’s most profitable operation, bringing in US$442-million in operating earnings in 2021. The mine is also a big boost to the region: Kinross’s 2020 sustainability disclosure notes the company made $190-million in payments to local governments and the mine contributed between 15 per cent and 20 per cent of the area’s gross domestic product.

Kinross said in a statement it is “deeply concerned about the tragic situation and the extent of casualties and destruction in Ukraine and wishes to express its sympathy and support for the people who are suffering because of the conflict.” It said it is hoping for a peaceful and diplomatic solution.

McCain Foods Ltd., the Canadian frozen French fry giant, began constructing a potato processing plant in 2020 in Russia’s Tula oblast. The company said it paused construction last week and was re-evaluating the future of the project. “A final decision will be taken in the coming days,” Charlie Angelakos, vice-president of global external affairs and sustainability, said in a statement. The company also donated $200,000 for relief efforts in Ukraine.

Canada Goose, maker of luxury parkas, said Wednesday it would suspend all sales in Russia and donate $100,000 for humanitarian aid in Ukraine. “Canada Goose is deeply concerned by the conflict unfolding in Ukraine. We stand with all of those who are impacted by the violence,” the company said in a statement.

And 100 business leaders wrote an open letter to the federal government urging Ottawa to step up sanctions on Russia and pledging, as business leaders, to unwind commercial relationships with the country. The signatories included John Chen, executive chairman of BlackBerry Ltd., and Walied Soliman, chair of Norton Rose Fulbright Canada LLP.

CCL Industries Inc. is another Canadian company with operations in Russia. The Toronto-based label maker has five factories in Russia that employ 428 people and manufacture labels for consumer packaging, pharmaceutical and food and beverage companies, some for products within Russia. The company said it brings in $70-million in sales in the country, a small share of its $5.7-billion in annual global revenue.

“[These are] crazy times,” CCL chief executive officer Geoffrey Martin said on a call last week to discuss the company’s earnings. “On behalf of all those people, we know perfectly well that none of them had anything to do with the situation that’s unfolded in the Ukraine, and they have our continuing support.”

At Couche-Tard, a similar concern for its Russian-based employees is playing out as it weighs its next move. The Laval, Que.-based company, which controls the Circle K chain, has 38 stores and more than 320 employees in Russia, part of its global footprint of 14,200 outlets.

“As our people are our number one priority, we are following the situation closely and continue to support our team members inside and outside Russia,” said Couche-Tard spokeswoman Jennifer Vincent. “At this point, we have made no plans to change our operations.”

Restaurant Brands International Inc., a fast-food chain that owns properties that include Tim Hortons, said it has 800 Burger King locations in Russia, all of which are owned and operated by local franchisees. The company said it had watched the attack on Ukraine “with horror” and is insisting that its Russian franchisees abide by international sanctions, including those imposed by Canada. The parent company’s statement came after its master franchisee in the country told Russian state-owned news agency RIA Novosti that Burger King continues to operate in Russia and plans to expand this year by opening more locations. Burger King Russia’s communications director told RIA the company considers Russia a strategic market.

Oil giant BP PLC, Russia’s biggest foreign investor, led the Western-company exodus this past weekend with its announcement that it would abandon its stake in Russian oil giant Rosneft, a decision that could cost it as much as US$25-billion in writedowns. Rival Shell PLC followed, citing Russia’s “senseless act of military aggression” as it cut ties with state-controlled Gazprom.

Calfrac Well Services Ltd., which has yet to report full-year 2021 results, said in its third-quarter report that its revenue from its Russian operations in the first nine months in 2021 was $94.1-million – 28 per cent higher than in the first three quarters of 2020. The company had $745-million in total revenue during those nine months of 2021. The company told The Globe it had no comment on its Russian operations.

Meanwhile, a Russian businessman has stepped down from the board of Buhler Industries Inc., a Winnipeg-based farm equipment company. In a statement on Wednesday, Buhler said its board has accepted Konstantin Babkin’s resignation as a director. He is well-known for publicly supporting Mr. Putin.

Other Canadian companies doing business in Russia could face mounting pressure to explain their stance on the country in the days ahead, especially if they’re traded publicly.

“We expect companies to act prudently and diligently, as they have a fiduciary duty to do,” said Willie Gagnon, director of Quebec investor-rights group Médac. He also urged companies to “pay particular attention to their social responsibility, beyond their legal obligations, in these tragic circumstances.”

Some companies have seen their exposure to Russia shrink over the years. BRP Inc., the Canadian maker of snowmobiles and watercraft, has sold into Russia for almost 30 years. BRP CEO José Boisjoli has travelled frequently to Russia in the past to boost business, and delegations from Russia have also travelled to Quebec to study how to replicate the province’s 35,000-kilometre network of snowmobile trails.

With a solid snowpack and an enthusiastic base of customers for power sports vehicles, Russia was BRP’s third-largest market after the United States and Canada as of 2014. Its importance to BRP declined in the years afterward.

Since the conflict in Crimea and the international sanctions that followed, BRP sales in Russia now represent less than 5 per cent of total sales, said company spokeswoman Biliana Necheva. National Bank analyst Cameron Doerksen pegs it more precisely at 1 per cent.

Gordon Johnston, CEO of Edmonton-based engineering firm Stantec Inc., told analysts asking about its exposure to the Russia region in recent days that it pulled out of Ukraine late last year as tensions increased. It had a project in Ukraine but wrapped it up last month after a meeting with its customers.

OpSens Inc., a Quebec City maker of fibre-optic sensors used in the medical and oil and gas industries, has sold some wares in Russia in the past and was eyeing the country as a market to develop until the war began. Now, it’s off the radar completely, CEO Louis Laflamme said.

“Even if the conflict disappeared tomorrow with a wave of a magic wand, there will be a long-term impact for any prospective business for companies like ours,” Mr. Laflamme said. “It’s just too risky and unpredictable. I’m not a political expert but it’s 2022. I would have naively thought the world was past a time when we sent tanks in to solve problems.

Stock futures inch lower as Russia-Ukraine tensions weigh

PUBLISHED WED, MAR 2 20226:07 PM ESTUPDATED 2 HOURS AGO

U.S. stock index futures were modestly lower during overnight trading Wednesday, after the major averages finished the day higher despite escalating tensions between Russia and Ukraine.

Futures contracts tied to the Dow Jones Industrial Average declined 28 points. S&P 500 futures shed 0.11%, while Nasdaq 100 futures dipped 0.2%.

During regular trading on Wednesday the Dow advanced nearly 600 points, or 1.79%, snapping a two-day losing streak. The S&P 500 gained 1.86%, while the Nasdaq Composite added 1.62%. It was the tech-heavy index’s fourth positive session in the last five.

Wednesday’s rally was broad based, with all eleven S&P 500 sectors advancing. Visa was the sole Dow component to decline, with the other 29 stocks in the benchmark index finishing the day in the green. Caterpillar was the top gainer, rising more than 5%.

Markets have been volatile in recent sessions as investors assess risks to the U.S. economy fueled by Russia’s war in Ukraine.

“The situation is very fluid on the ground in Ukraine. …We don’t know where the ultimate bottom in the market may be, but we continue to believe the U.S. economy will have above-average growth this year,” said Scott Wren, senior global market strategist at Wells Fargo Investment Institute.

Despite Wednesday’s advance all three major averages are down more than 4% over the last month, with the Nasdaq Composite still in correction territory. Ed Moya, senior market analyst at Oanda, said that volatility is likely here to stay.

“Risk appetite will struggle to fully return until a true end in the war in Ukraine is in sight,” he said. “Wall Street wants to take a break from the defensive playbook and hold off overloading on utilities, healthcare and consumer staples stocks,” Moya added.

Wednesday’s broad market strength came despite the continued jump in oil prices, which is contributing to inflation fears across the economy. West Texas Intermediate crude futures, the U.S. oil benchmark, topped $112 per barrel during Wednesday’s session, a price last seen in May 2011.

Amid rampant inflation Federal Reserve Chairman Jerome Powell said that he remains committed to easing cost pressures through rate hikes, despite the uncertainty unfolding in Ukraine.

“We’re going to avoid adding uncertainty to what is already an extraordinarily challenging and uncertain moment,” he said under questioning from House Financial Services Committee members.

“To the extent that inflation comes in higher or is more persistently high than that, we would be prepared to move more aggressively by raising the federal funds rate by more than 25 basis points at a meeting or meetings,” he added. Powell will testify again tomorrow before the Senate Banking Committee.

The yield on the benchmark U.S. 10-year Treasury advanced Wednesday to about 1.9%, after dipping below 1.7% during the prior session.

A strong private payrolls report on Wednesday also boosted sentiment on Wall Street. On Thursday weekly jobless claims will be posted, with economists calling for a print of 225,000, according to estimates from Dow Jones.

The reading comes ahead of February’s highly-anticipated jobs report, which will be released Friday. Economists are expecting 440,000 jobs to have been added during the month. January’s report showed an increase of 467,000.

Services PMI and ISM Services readings will also be released Thursday morning.

On the earnings front several retailers are set to post results ahead of the opening bell, including Big Lots, BJ’s Wholesale, Burlington Stores and Kroger. Broadcom, Costco and Gap are on deck for after the market closes.