Risk sentiment improves, but Russia faces hard blowback

<p>Kia ora,</p><p>Welcome to Tuesday’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 risk sentiment in financial markets seems to be improving.</p><p>But in Europe, the horrors of Russian 'war crimes' are hardening attitudes. Lithuania has <a href="https://enmin.lrv.lt/lt/naujienos/lietuva-visiskai-atsisake-rusisku-duju" target="_blank"><strong>declared</strong></a> it won't buy any Russian gas or oil. Other European countries are distancing themselves further from economic contact with Russia. Berlin has <a href="https://www.rferl.org/a/germany-gazprom-subsidiary-takeover/31785610.html" target="_blank"><strong>taken control</strong></a> of Gazprom’s German business in a move they say was necessary to secure continuity of supply in Germany and Europe. As a consequence the world's oil markets are very unsettled.</p><p>Only <a href="https://www.reuters.com/world/europe/sweeping-ballot-win-sets-orban-collision-course-with-brussels-2022-04-04/" target="_blank"><strong>Hungary</strong></a> is turning a blind eye to what is happening.</p><p>Meanwhile, American <a href="https://www.census.gov/manufacturing/m3/prel/pdf/s-i-o.pdf" target="_blank"><strong>factory orders fell</strong></a> -0.5% in February from January, in line with what was expected. What wasn't expected was an upward revision for January however. The February decline was largely due to fewer orders for "transportation equipment" which means fewer orders for aircraft. Excluding that, factory orders actually rose +0.4% in a month, and are up almost +13% from February 2021.</p><p>Also rising strongly were Canadian <a href="https://www150.statcan.gc.ca/n1/daily-quotidien/220404/dq220404a-eng.htm?HPA=1" target="_blank"><strong>building permits</strong></a> in February which were up more than +26% from a year ago and a record high for any February month, up +21% from January.</p><p>The Bank of Canada <