Futures erase losses with eyes on the Russia-Ukraine border

• The conflict between Russia and Ukraine dominates market sentiment at the start of the week.
• Equity markets in Europe trimmed losses in the last hour on positive signs.
• US futures move into positive territory after recent developments.

The equity markets in Europe are falling more than 2% on average, after cutting losses in the last hour due to the latest developments in the situation between Russia and Ukraine. That momentum led to major US index futures erasing losses.

Tensions between Russia and Ukraine led to sharp declines in share prices around the world. The casualties were cut in the last hour due to the declarations of the Russian Foreign Minister, Sergei Lavrov, proposing to continue with the diplomatic efforts. German Chancellor Olaf Scholz will visit Ukraine on Monday and Russia on Tuesday.

The possibility of a Russian invasion of Ukraine remains highly likely according to US State Department officials and this is hurting the mood of the markets while also supporting oil prices. A barrel of WTI hit new highs in years above $94.50, before retreating below $92.50.

Wall Street index futures are in barely positive territory. The S&P 500 is up 0.07%, while the Nasdaq is up 0.05%. In Europe, the CAC 40 falls 2.25%, while the FTSE 100 falls 1.39%, both far from their lows.

Among the currencies, the dollar and the yen are the currencies most favored by risk aversion, although they cut gains in the last hours after the recovery of the European stock markets.

The treasury bond yields they rebounded strongly after the latest developments and moved into positive territory for the day. The 10-year rate rose from 1.90% to 1.97%, while the 30-year rate rose from 2.21% to 2.27%.

Technical levels