Russia sanctions ripple across world markets, rouble tanks

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London — The ruble hit a record low on Monday as global stocks fell, oil prices soared, as the West tightened sanctions on Russia against attacks on Ukraine, including a block of banks from the SWIFT global payment system. ..

The Central Bank of Russia has urgently raised key interest rates from 9.5% to 20%, and authorities have sent foreign currency to export-focused companies as the ruble fell almost 30% to record record lows against the dollar. He said he was ready to sell.

As Russia’s economic crisis looms, the effects of stricter Western sanctions imposed over the weekend have spilled over into the financial markets as a whole.

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European stocks fell 2%. European banks most exposed to Russia, such as Austria’s Raiffeisen Bank, UniCredit and Societe Generale, fell 9-15%, while the broader eurozone banking index fell 7%.

US stock futures were deep into the negative territory, although MSCI’s broad gauge Asian stocks and the Nikkei Stock Average in Japan showed a slight rise.

Peter Garnley, Head of Equity Strategy at Saxo Bank, said:

Meanwhile, oil prices soared after Russian President Vladimir Putin put nuclear forces on alert on Sunday, the fourth day of the biggest assault on European nations since World War II.

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Increasing tensions have raised concerns that oil supplies from the world’s second-largest producer could be disrupted and Brent crude oil futures could rise 5% to $ 102.86. US West Texas intermediate crude oil futures were up almost 5.0% at $ 4.62, or $ 96.24 a barrel.

John Millroy, financial adviser to Audminette in Sydney, said:

“It’s an old cliché, but it’s true that uncertainty moves in both directions.”

SAFE-HAVENS SHINE

Investors plunged in search of security for the dollar, Swiss franc and Japanese yen as uncertainty continued to dominate the market.

The euro fell 1% to $ 1.1168 and 0.9% to 129.08, while the risk-sensitive Australian and New Zealand dollars fell 0.5% and 0.3%, respectively.

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Sovereign bonds, such as US Treasuries and German government bonds, are considered one of the safest assets in the world and remain in strong demand.

The 10-year US Treasury yield fell about 7 basis points to 1.90% in London trade, while the equivalent German yield fell 6 basis points to 0.16%.

Money markets continued to push down expectations for rate hikes, with investors setting prices this year around 30 basis points, the equivalent of a tightening from the European Central Bank, down from 35bps last week.

Gold rose 0.61% to about $ 1,899.

The Russian ruble fell nearly 30% to a record low of $ 120 per dollar, but recovered to some extent towards the final deal at just over $ 100.

MSCI’s Russian stock index fell 25%, while London- and Frankfurt-listed exchange-traded funds (ETFs) fell more than 35% as investors dumped Russian assets.

(Report by Dhara Ranasinghe, additional report by Kevin Buckland in Tokyo, edited by Jason Neely)