- European stocks fall more than 4% on average, S&P futures lose 2.25%.
- Attacks and entry of Russian troops into Ukraine generated sharp falls in the markets.
- Oil soars and rises more than 6%; gold and silver also climb strongly.
- The yen and the dollar benefit from the demand for haven assets.
Stock markets around the world fall sharply on Russia’s invasion of Ukraine. Wall Street futures are down more than 2%, adding to Wednesday’s declines. In Europe the falls in the indices reach 5%. Oil skyrocketed.
Russia Attack Sparks Drama in Global Financial Markets
Russia launched attacks against Ukraine, and the latest reports indicate that Russian troops entered the Kiev region. European leaders are meeting to assess responses. The markets reacted with a flight to haven assets and a spike in commodity prices, including oil. The Benchmark crude oil prices rise more than 6% to new highs in years.
This new scenario puts embarrassment to the central banks, since the rise in raw materials implies more pressure on prices, while the conflict can affect confidence and economic activity, at a time when central banks throughout the world begin to adjust monetary policy.
Government bonds are rising. The US 10-year bond yields 1.88% and the 30-year bond 2.18%. The Bitcoin did not work as a safe haven and loses 5%. BTC/USD fell as low as 34,250, close to the January lows.
Among the coins, the and in it is being one of the most favored by the risk-averse climate, although it has moderated its progress in recent hours. USD/JPY fell to 114.39, a three-week low, and then bounced back to 114.80. The US Dollar Index (DXY) is up almost 1%, trading above 97.00, looking towards the January peak.
The Russian ruble is having a day of sharp movements. After having a historic collapse, it later recovered due to interventions by the Russian central bank. USD/RUB trades at 83.80, up almost 3% on the day; hours ago it had reached 90.00. Stocks in Moscow have trimmed losses but are still suffering a historic drop. The MOEX index falls 23%.
The fFutures of the S&P 500 fall 2.25%, and those of the Nasdaq 2.81%. The negative climate in the markets is widespread. In Europe, the DAX yields 4.75% and the CAC 40 4.60%. Gold and silver have soared to their highest in months.
Several US economic reports will be released on Thursday including the weekly jobless claims report, a new fourth-quarter GDP growth reading, new home sales and the Kansas Fed index. The data will likely take a backseat, with the focus on Russia’s attacks on Ukraine and the response from the rest of the world.
The words of officials of the Federal Reserve they may be interesting considering the new global context of higher oil prices and greater uncertainty. Speakers include Thomas Barkin of the Richmond Fed, Mary Daly of the San Francisco Fed, Raphael Bostic of the Atlanta Fed, Loretta Mester of Cleveland and Governor Christopher Waller. Corporate earnings releases on Thursday include Alibaba, Moderna, Nikola, Six Flags, and Anheuser-Busch InBev, among others.
Source: Fx Street
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