European Shares Open Lower – Pressure on Russian System
European reserves fall. Oil prices rose since the Russian president put his country’s nuclear forces on high alert and Western powers imposed sanctions on Russia’s central bank in response to its invasion of Ukraine. Following the rally on Friday, the Stoxx 600 stock index opened lower by 1.3 percent. The European Banking Sub-Index dropped more than 5 percent in early trading. Xetra Dax lost 2 percent. The FTSE 100 fell 1 percent. The Hang Seng index lost 1.6 percent to its lowest level in almost a year. The international benchmark price for Brent crude oil rose to $102.43 a barrel, or 4.6 percent. Meanwhile, futures-related to TTF increased by 24 percent.
The ruble dropped 29 percent on Monday morning; In total, it amounted to almost 118 against the U.S. dollar. Russia’s central bank doubled interest rates to 20 percent. It also banned the sale of Russian securities abroad to suspend sanctions. Global stocks rose on Friday. These analysts attributed the sanctions imposed on Russia; Which avoided the country’s energy export targets. The United States and its Western allies have expelled some Russian creditors from Swift’s bank payment system.
On Monday, traders tore positions that did not meet the capital criteria; Also acquired shelter assets, including dollars and longer-term government bonds; They also abandoned bond trading, which provided them with interest rates in the form of central bank bets.
Russia-Ukraine Crisis and Global Shares
The dollar index rose 0.5 percent. The interest rate on the U.S. Treasury 10-year benchmark bond fell by 0.07 percentage points to a total of 1.91 percent. The two-year interest rate on U.S. Treasury bonds lost 0.09 percentage points to nearly 1.5 percent. This reflects a significant increase in the price of debt. Yields on the five-year German Bund fell by the same amount, to minus 0.08 percent.
At the European Central Bank, Barclays economists plan to predict further growth in inflation, which hit a record high in the eurozone in January. The FTSE index of emerging market shares fell 0.3 percent. Investors avoided popular trading based on emerging economies’ bets, which high coronavirus rates hit.
Russian and Stocks
Meanwhile, potential delays in grain supplies from Ukraine and Russia, which account for about 30 percent of global wheat exports, pushed up futures prices. Wheat futures trading in Chicago rose to $9.20, close to a 13-year high on Friday. B.P. shares fell 3.9 percent; After the British group announced that it would seize a 20 percent stake in Russian state oil provider Rosneft over the weekend. Futures markets predict that the US S&P 500 stock index will drop 1.5 percent in early trading in New York.
