Euro currency bills are pictured at the Croatian National Bank in Zagreb, Croatia, May 21, 2019. REUTERS/Antonio Bronic
Register now for FREE unlimited access to Reuters.com
Register
Rouble set for 25% plunge to fresh record low
Safe-haven dollar and yen gain; Aussie, kiwi slide
U.S. 10-year Treasury futures jump a full point
TOKYO, Feb 28 (Reuters) – U.S. equity futures sank with the euro while the safe-haven dollar and yen were in demand on Monday after Western nations imposed fresh sanctions on Russia for its invasion of Ukraine, including blocking some banks from the SWIFT international payments system.
U.S. 10-year Treasury futures rose a full point, while the Russian rouble indicated as much as 25% weaker at a new record low around 112 per dollar.
The fall in the rouble came after Russian President Vladimir Putin put nuclear-armed forces on high alert on Sunday, the fourth day of the biggest assault on a European state since World War Two. read more
Register now for FREE unlimited access to Reuters.com
Register
At the same time, Asia-Pacific stock markets were higher in early trade, with Australia’s benchmark (.AXJO) rising 0.39% and New Zealand’s (.NZ50) up 0.74%.
That was the knock-on effect of Wall Street gains from Friday, when the S&P 500 closed up 2.51%, said Kyle Rodda, a market analyst at IG Australia.
U.S. emini stock futures though were pointing to a 2.32% drop at the restart.
“We had a deluge of very negative information over the weekend,” Rodda said.
“My sense is there’s not going to be much staying power behind this particular move (in Asia-Pacific stocks), considering we’re talking about financial stability risks, and sprinkle over that the threat of nuclear war.”
“The FX market seems to be the best signal (of market sentiment) at the moment.”
The euro slid 0.9% to $1.1165 and 0.85% to 129.15 yen , while the risk-sensitive Australian and New Zealand dollars sank 0.76% and 0.85%, respectively.
Register now for FREE unlimited access to Reuters.com
Register
Editing by Stephen Coates
Our Standards: The Thomson Reuters Trust Principles.
A woman wearing a face mask walks past a screen displaying Hang Seng Index, in Hong Kong, China February 24, 2022. REUTERS/Tyrone Siu
Register now for FREE unlimited access to Reuters.com
Register
Asian, Wall Street shares move higher
Russia advances into Ukraine
Rally may be brief, analysts caution
Western countries sanction Russian banks, SOEs
SINGAPORE, Feb 25 (Reuters) – Asian markets rebounded on Friday following Wall Street’s surprising overnight reversal, as investors weighed the longer-term impact of tough Western sanctions against Russia after it
unleashed troops, tanks and missiles on Ukraine.
European stock markets looked set to follow Asia higher even as Russia pressed its attacks and global condemnation grew, with FTSE futures adding 0.78%, European futures up 2.2% and German stock market DAX futures rising 1.56%.
Register now for FREE unlimited access to Reuters.com
Register
But U.S. share futures slipped in Asian trade, with S&P500 e-mini futures losing 0.61% and Nasdaq futures down 0.92%.
Some analysts said the sanctions by the United States, Europe and a number of other countries were not as strong as markets had feared.
While Western nations redoubled their efforts to crimp Russia’s ability to do business — freezing bank assets and cutting off state-owned enterprises — they stopped short of disconnecting Russia from the SWIFT international banking system or targeting its oil and gas exports, which some analysts said had helped markets to recover. read more
“The limits to the economic pain that the ‘West’ was prepared to tolerate to support Ukraine and punish Russia have been revealed within 24 hours of Russia’s offensive beginning,” Jeffrey Halley, senior market analyst at OANDA, said in a note.
“The Russian offensive has occurred in a time of already high inflation and commodity shortages globally, and the West has blinked immediately. The process of throwing Ukraine under the geopolitical bus has begun. Markets clearly felt the same way, that this is the worst it can get…Thereafter, the power of buy-the-dip proved irresistible.”
MSCI’s broadest index of Asia-Pacific shares outside Japan (.MIAPJ0000PUS) was up 0.57% by midday, Shanghai’s composite index (.SSEC) was up 0.57% and Japan’s Nikkei (.N225) was up 1.27%. South Korea’s benchmark KOSPI index added 1.01%, recovering from a decline on Thursday.
Hong Kong’s Hang Seng index and Australian shares fell slightly, 0.44% and 0.03% respectively, after a strong start.
Investors rediscovered their risk appetite overnight after some initial sharp losses, with major U.S. indices posting gains, led by tech stocks.
But some analysts worry any rallies might be fleeting.
“Biden’s sanctions and reluctance to pour troops in is providing some relief. But this conflict is going to be a protracted issue and add to global inflationary pressures that will keep central banks on track for tightening,” said Kyle Rodda, analyst at IG Markets in Melbourne.
“It’s okay for now, but in the long-term the market will be tracking to the downside,” he said.
Oil prices surged again on worries about supply disruptions, with Brent crude rising 2% to $101.80 a barrel, while U.S. West Texas Intermediate (WTI) crude also rose 2.71% to $95.53, although both benchmarks were off their highs.
Safe haven gold inched higher 0.57% to $1,913 an ounce after easing back from a multi-month high of $1,973.96 that it hit on Thursday.
The yield on 10-year U.S. Treasuries was at 1.95% after an initial slide to 1.84% on Thursday, its biggest daily drop since late November.
The U.S. dollar index , which measures the greenback against a basket of major currencies, eased 0.23% to 96.87, having risen on Thursday to levels last seen during the first wave of the coronavirus pandemic. The Russian rouble rose again and was at 85.52 against the dollar, clawing back from a record low of 89.986.
Ukrainian President Volodymyr Zelenskiy said late on Thursday a new iron curtain was descending over Europe.
Ukrainian soldiers battled Russian troops as they poured in from three sides while about 100,000 people fled their homes, according to the United Nations, many hunkering down in basements and subway stations to escape shelling. Ukrainian authorities said 137 people had been killed on the first day of fighting. read more
On Thursday, the Dow Jones Industrial Average (.DJI) closed up 92.07 points, or 0.28%, at 33,223.83 while the S&P 500 (.SPX) gained 63.2 points, or 1.50%, to 4,288.7 and the Nasdaq Composite (.IXIC) added 436.10 points, or 3.34%, to 13,473.59.
Register now for FREE unlimited access to Reuters.com
Register
Reporting by Kanupriya Kapoor; editing by Richard Pullin and Kim Coghill
Our Standards: The Thomson Reuters Trust Principles.
Queen Elizabeth, 95, has tested positive for COVID-19
Sons Andrew and Charles embroiled in scandals
Celebrations this year to mark 70 years on throne
WINDSOR, England, Feb 21 (Reuters) – After the shame of Prince Andrew’s U.S. sex abuse lawsuit and Prince Charles embroilment in a cash for honours scandal, Queen Elizabeth catching COVID-19 has rounded off a week of terrible news for the British royals.
Buckingham Palace said on Sunday the monarch, who turns 96 in two months, was suffering mild symptoms after testing positive for the virus. But growing health fears and scandals involving the family are threatening to overshadow national celebrations to mark her 70th anniversary on the throne.
“I suspect this is not a week on which any member of the royal family will look back with particular pleasure,” said Matthew Dennison, author of a recent biography “The Queen”.
Register now for FREE unlimited access to Reuters.com
Register
Just two weeks ago, the royals were enjoying a warm wave of public and media praise as Elizabeth, currently the world’s oldest and longest-reigning monarch, marked seven decades on the throne, a milestone never reached by any of her predecessors over the last 1,000 years. read more
The confidence was such that the monarch was able to announce that Camilla, the once vilified second wife of 73-year-old heir Prince Charles, should become Queen Consort when he became king. read more
But, then last Tuesday it was announced Prince Andrew, Elizabeth’s second son, had paid to settle a claim that he sexually assaulted a teenage girl decades ago and, while he admitted no wrongdoing, royal experts say the outcome of the case spelled the end of his public royal role.
Two days later, police said they were investigating allegations that honours were offered to a Saudi national in return for donations to one of Prince Charles’s charities. read more
The same day, Elizabeth quipped she could not move much when she carried out an in-person engagement at her Windsor Castle home, although a palace source said that was because she was feeling slightly stiff rather than being unwell.
“Thank God For The Queen”, the Sun tabloid said on its front page the following day.
But on Sunday, the Palace announced the queen, who has been fully vaccinated, had tested positive for COVID. While officials said she would still be carrying out light duties, it has cast a pall over her Platinum Jubilee year. read more
“This is intended to be a year of celebration for the queen …and events that detract from that obviously are regrettable,” Denison said.
“But of course the worst possible thing is that the queen could be ill and therefore not enjoy this Jubilee. So…, this is of course bad news.”
Britain’s Queen Elizabeth visits the Energetics Analysis Centre at the Defence Science and Technology Laboratory at Porton Science Park, near Salisbury, Britain October 15, 2020. Ben Stansall/Pool via REUTERS
Read More
For most people, Elizabeth is synonymous with Britain, and her recent health scares have raised questions about the monarchy’s future that have hitherto received little public attention. read more
What the future holds when her unifying presence is gone and her son Charles, who polls show is much less popular, succeeds her is becoming of increasing concern for both the royal family, and the country as a whole.
“I’m just really upset…Everyone loves her,” student Gerard Smith, 19, told Reuters in Windsor. “She’s been my whole lifetime and the lifetime of almost everyone. Hopefully, she makes it though.”
COUNSELLORS OF STATE
Despite her age, Elizabeth still carries out large numbers of official duties, performing 113 official engagements during the year from April 2020 to March 2021.
While the loss of husband Prince Philip, who died last April aged 99 after more than seven decades by her side, did not affect her work schedule, recent illness has.
She spent a night in hospital last October for an unspecified ailment and has had to cancel engagements since then on doctors’ advice, while also on one occasion she suffered from a sprained back.
Royal rules dictate that if the queen cannot perform her duties because of ill health, then four senior royals can be appointed Counsellors of State to act on her behalf.
However, two of those four options are Prince Andrew, who has effectively been stripped of his royal titles, and her grandson Prince Harry who stepped down from official duties to move to Los Angeles with his American wife Meghan, from where they have been highly critical of Buckingham Palace.
Last week, a hearing in the court case he has brought against the government over its refusal to allow him to pay for police protection was heard at the High Court in London
“The first choice would be the Prince of Wales (Charles) and the Duke of Cambridge (grandson Prince William), and so as long as they are available to carry out those functions, then clearly this remains a workable arrangement,” Dennison said.
Buckingham Palace has previously said the issues of counsellors was not a debate in which it would get involved.
“It has come thick and fast for the queen in the last few days, weeks and months,” Roya Nikkhah, royal editor of the Sunday Times newspaper, told BBC radio. “She’s had a rough old ride from her family, a lot of hassle in a year that should be celebratory, but on she ploughs.”
Register now for FREE unlimited access to Reuters.com
Register
Additional reporting by Helena Williams Writing by Michael Holden
Editing by Mark Heinrich
Our Standards: The Thomson Reuters Trust Principles.
Biden, Putin accept ‘principle’ of summit on Ukraine
S&P futures up 0.5%, European stocks up 0.34%
Euro rises 0.3% vs dollar
LONDON, Feb 21 (Reuters) – U.S. stock index futures rallied, the euro rose and global stocks steadied on Monday as a glimmer of hope emerged for a diplomatic solution to the Russia-Ukraine standoff.
U.S. President Joe Biden and Russian President Vladimir Putin have agreed in principle to hold a summit on the Ukraine crisis. read more
The Kremlin said there were no concrete plans in place for a summit, but that a call or meeting could be set up at any time.
Register now for FREE unlimited access to Reuters.com
Register
A summit would be held only if Russia did not first invade Ukraine, which Western countries have said it could do at any moment despite repeated denials. Russia extended military drills in Belarus due to end Sunday, and Western countries say it has continued to build up troops on the Ukraine border. read more
“Markets are taking President Putin at his word that he is not wanting a full-scale escalation, volatility is elevated but it’s still contained,” said Giles Coghlan, chief currency analyst at HYCM.
In a reminder of the stakes, Reuters reported Biden had prepared a package of sanctions that includes barring U.S. financial institutions from processing transactions for major Russian banks. read more
S&P 500 stock futures rose 0.5%. Nasdaq futures gained 0.3%, having been down more than 1%. U.S. markets are on holiday on Monday, but futures still traded.
MSCI’s world equity index (.MIWD00000PUS) was little changed above 2-1/2 week lows hit on Friday.
European stocks (.STOXX) rose 0.34% and British stocks (.FTSE) rallied 0.4%.
MSCI’s broadest index of Asia-Pacific shares outside Japan (.MIAPJ0000PUS) pared earlier losses to be off 0.3%, while Japan’s Nikkei (.N225) halved its drop to be down 0.8%.
The euro firmed 0.3% to $1.1355 while the U.S. dollar index fell 0.27% to 95.866 , well short of a 1-1/2 year high of 97.441 hit last month.
The dollar dipped to 114.91 against the yen .
FED TIGHTENING
Also troubling markets has been the prospect of an aggressive tightening by the U.S. Federal Reserve as inflation runs rampant. The Fed’s favoured measure of core inflation is due out later this week and is forecast to show an annual rise of 5.1% – the fastest pace since the early 1980s.
“January inflation readings have surprised materially to the upside,” said JPMorgan chief economist Bruce Kasman.
“We now look for the Fed to hike 25bp (basis points) at each of the next nine meetings, with the policy rate approaching a neutral stance by early next year.”
At least six Fed officials are set to speak this week and markets will be hyper-sensitive to their views on a possible hike of 50 basis points in March.
Recent commentary has leant against such a drastic step and futures have scaled back the chance of a half-point rise to around 20% from well above 50% a week ago.
That helped short-term Treasuries pare a little of their losses last week, while the whole curve bull flattened as safe-haven buying pulled 10-year yields down to 1.9268% .
German 10-year government bonds
The euro zone economic recovery rebounded sharply this month as an easing of coronavirus restrictions gave a boost to the bloc’s dominant service industry, according IHS Markit’s Flash Composite Purchasing Managers’ Index,
In oil markets, Brent crude gained 28 cents to $93.80, while U.S. crude rose 23 cents to $91.30.
Oil had suffered its first weekly loss in two months last week, taking it off seven-year highs, amid tentative signs of progress on an Iran deal which could release new supply into the market.
An accord still looks distant, however, and is offset by the risk of sanctions against major oil producer Russia in the event of a Ukraine invasion.
Ministers from Arab oil-producing countries on Sunday rejected calls to pump more and said OPEC+ – the alliance of OPEC countries and other suppliers including Russia – should stick to its current agreement to add 400,000 barrels of oil per day.
Gold has benefited from its status as one of the oldest of safe harbours, climbing to nine-month highs of $1,908 an ounce, before dropping back to $1,896 an ounce .
Register now for FREE unlimited access to Reuters.com
Register
Editing by Kenneth Maxwell, Lincoln Feast, Peter Graff
Our Standards: The Thomson Reuters Trust Principles.
SYDNEY, Feb 21 (Reuters) – Australian Prime Minister Scott Morrison said a Chinese naval vessel that pointed a laser at an Australian defence plane was potentially visible from Australia’s mainland, as Canberra demands a “full investigation” by Beijing.
Morrison said on radio on Monday his government had not received an explanation from China over the incident last Thursday, considered by Canberra as a “dangerous and reckless act”.
A Chinese navy vessel within Australia’s exclusive economic zone directed a laser at an Australian military aircraft in flight over Australia’s northern approaches, illuminating the plane and potentially endangering lives, Australia’s defence said on Saturday. read more
Register now for FREE unlimited access to Reuters.com
Register
The P-8A Poseidon – a maritime patrol aircraft – detected a laser emanating from a People’s Liberation Army – Navy (PLA-N) vessel, the Defence Department said, releasing photographs of two Chinese vessels sailing close to Australia’s northern coast.
A PLA-N Luyang-class guided missile destroyer and a PLA-N Yuzhao-class amphibious transport dock vessel leave the Torres Strait and enter the Coral Sea February 18, 2022. Picture taken February 18, 2022. Australian Defence Department/Handout via REUTERS ATTENTION EDITORS – THIS IMAGE HAS BEEN SUPPLIED BY A THIRD PARTY. NO RESALES. NO ARCHIVES
Read More
A Chinese guided missile destroyer and an amphibious transport dock were sailing east through the Arafura Sea between New Guinea and Australia at the time of the incident, and later passed through the narrow Torres Strait.
“It’s possible people could even see the vessel from our mainland, potentially,” Morrison told reporters in Tasmania on Monday.
Australia had called through diplomatic and defence channels for “a full investigation into this event”, he said on local radio.
He compared the incident to a hypothetical situation of an Australian frigate pointing a laser at Chinese surveillance aircraft in the Taiwan Strait, adding: “Could you imagine their reaction to that in Beijing?”
The Chinese embassy in Canberra did not respond to a request for comment. Beijing has not commented publicly about the incident.
Register now for FREE unlimited access to Reuters.com
Register
Reporting by Kirsty Needham; Editing by Lincoln Feast.
Our Standards: The Thomson Reuters Trust Principles.
A Singapore Airlines plane arriving from Singapore lands at the international terminal at Sydney Airport, as countries react to the new coronavirus Omicron variant amid the coronavirus disease (COVID-19) pandemic, in Sydney, Australia, November 30, 2021. REUTERS/Loren Elliott
Register now for FREE unlimited access to Reuters.com
Register
SYDNEY, Feb 21 (Reuters) – Australia on Monday fully reopened its international borders to travellers vaccinated against the coronavirus after nearly two years of pandemic-related closings as tourists returned and hundreds of people were reunited with family and friends.
More than 50 international flights will reach the country through the day, including 27 touching down in Sydney, its largest city, as the tourism and hospitality sectors look to rebuild after getting hammered by COVID-19 restrictions.
“It is a very exciting day, one that I have been looking forward to for a long time, from the day that I first shut that border right at the start of the pandemic,” Prime Minister Scott Morrison told reporters in the island state of Tasmania, which relies heavily on tourism.
Register now for FREE unlimited access to Reuters.com
Register
After being away from loved ones for months there were many emotional reunions, including for Cindy Moss who travelled from the U.S. state of Kentucky to see her daughter.
“I just haven’t seen her in so long and it was such a big thing to be able to get over here. So I’m so excited,” she said after hugging her daughter, her voice cracking with emotion.
Tourism is one of Australia’s biggest industries, worth more than A$60 billion ($43 billion) and employing about 5% of the country’s workforce. But the sector was crippled after the country shut its borders in March 2020.
Once a champion of COVID-suppression strategy, Australia shifted away from its fortress-style controls and relentless lockdowns since late last year and began living with the virus after reaching higher vaccination levels. Skilled migrants, international students and backpackers have been allowed to fly into Australia since November in a staggered reopening exercise.
“IT’S A PARTY OUT HERE”
Passengers flying to Sydney were greeted from the air with “Welcome Back World!” painted on a sign near the runways while people in kangaroo costumes welcomed travellers and a DJ played music from a van festooned with a banner saying “You were worth the wait”.
“It is a party out here, music playing, smiles on people’s faces, they will be dancing soon, I’m sure,” Tourism Minister Dan Tehan told broadcaster ABC from Sydney airport as he gave travellers gift jars of Vegemite, an iconic Australian food spread, and stuffed koala toys.
Tehan said he was hopeful for a “very strong” rebound in the tourism market, with Qantas (QAN.AX) looking to fly more than 14,000 passengers into Australia this week. Virgin Australia said it was seeing positive trends in domestic bookings and continued to assess demand for international flights.
All trains in Sydney, meanwhile, were cancelled on Monday after pay disputes between the union and the state government, taking some shine off the reopening.
As borders fully reopen, Australia’s outbreak of the Omicron coronavirus variant appears to have passed its peak with hospital admissions steadily falling over the past three weeks. The bulk of Australia’s pandemic total of about 2.7 million confirmed cases has been detected since the emergence of Omicron in late November. Total deaths stood at 4,929.
Just over 17,000 new cases and 17 deaths were registered by midday on Monday with theNorthern Territory due to report later.
($1 = 1.3959 Australian dollars)
Register now for FREE unlimited access to Reuters.com
Register
Reporting by Renju Jose, Byron Kaye, James Redmayne and Cordelia Hsu; Editing by Grant McCool, Gerry Doyle and Christian Schmollinger
Our Standards: The Thomson Reuters Trust Principles.
MELBOURNE, Feb 20 (Reuters) – Australian Prime Minister Scott Morrison accused Beijing of an ‘act of intimidation’ after a Chinese navy vessel directed a laser at an Australian military surveillance aircraft last week.
A P-8A Poseidon maritime patrol aircraft was illuminated on Thursday while flying over Australia’s northern approaches by a laser from a People’s Liberation Army–Navy (PLA-N) vessel, potentially endangering lives, the defence department said. read more
Morrison said his government will demand answers from Beijing.
Register now for FREE unlimited access to Reuters.com
Register
“I can see it no other way than an act of intimidation, one (…) unprovoked, unwarranted,” Morrison said at a briefing. “And Australia will never accept such acts of intimidation.”
Australian Prime Minister Scott Morrison speaks to the media at Melbourne Commonwealth Parliament Office, in Melbourne, Australia February 11, 2022. Darrian Traynor/Pool via REUTERS
Defence Minister Peter Dutton called the incident “a very aggressive act” that took place in Australia’s exclusive economic zone.
“I think the Chinese government is hoping that nobody talks about these aggressive bullying acts,” Dutton told Sky News television. “We’re seeing different forms of it right across the region and in many parts of the world.”
The Chinese vessel was sailing east with another PLA-N ship through the Arafura Sea at the time of the incident, the department said. The sea lies between the north coast of Australia and the south coast of New Guinea.
Relations between Australia and China, its top trade partner, soured after Canberra banned Huawei Technologies Co Ltd [RIC:RIC:HWT.UL] from its 5G broadband network in 2018, toughened laws against foreign political interference, and urged an independent investigation into the origins of COVID-19.
Register now for FREE unlimited access to Reuters.com
Register
Reporting by Lidia Kelly; editing by Jonathan Oatis
Our Standards: The Thomson Reuters Trust Principles.
SYDNEY, Feb 19 (Reuters) – A Chinese navy vessel directed a laser at an Australian military aircraft in flight over Australia’s northern approaches, illuminating the plane and potentially endangering lives, Australia’s defence said on Saturday.
A P-8A Poseidon – a maritime patrol aircraft – detected a laser emanating from a People’s Liberation Army – Navy (PLA-N) vessel, the Defence Department said in a statement.
“Illumination of the aircraft by the Chinese vessel is a serious safety incident,” the department said. “Acts like this have the potential to endanger lives. We strongly condemn unprofessional and unsafe military conduct.”
Register now for FREE unlimited access to Reuters.com
Register
The Chinese vessel was sailing east with another PLA-N ship through the Arafura Sea at the time of the incident, the department said. The sea lies between the north coast of Australia and the south coast of New Guinea.
The defence department said that both ships have since transited through the Torres Strait and were in the Coral Sea.
Relations between Australia and China, its top trade partner, soured after Canberra banned Huawei Technologies [RIC:RIC:HWT.UL] from its 5G broadband network in 2018, toughened laws against foreign political interference, and urged an independent investigation into the origins of COVID-19.
In 2019, Chinese maritime militia vessels initiated a series of laser attacks on Australian pilots while flying over the South China Sea, according to a report by the Australian Broadcasting Corporation (ABC).
Register now for FREE unlimited access to Reuters.com
Register
Reporting by Kirsty Needham;
Writing by Lidia Kelly; Editing by Simon Cameron-Moore
Our Standards: The Thomson Reuters Trust Principles.
A man looks at stock market monitors in Taipei October 8, 2008. REUTERS/Nicky Loh (TAIWAN)/File Photo
Register now for FREE unlimited access to Reuters.com
Register
Blinken to meet Lavrov next week – U.S. state dept
E-minis bounce, gold and safe-haven currencies edge down
Asian shares down, but pare some early losses
SINGAPORE, Feb 18 (Reuters) – U.S. and European stock futures bounced back on Friday and selling pressure on Asian shares eased after the U.S. Secretary of State agreed to a meeting with Russia’s foreign minister, raising hopes of a solution to the standoff over Ukraine.
S&P 500 futures jumped 0.7% and Nasdaq futures gained 0.8% following the news, while, in early trading, pan-region Euro Stoxx 50 futures were up 0.45%, and FTSE futures were 0.4% higher.
The positive sentiment ranged across asset classes. Safe-haven currencies such as the Japanese yen and Swiss franc retreated a little in Asia trade having climbed to two-week highs on the dollar overnight, and gold lost 0.4%.
Register now for FREE unlimited access to Reuters.com
Register
U.S. Secretary of State Antony Blinken has accepted an invitation to meet with Russian Foreign Minister Sergei Lavrov late next week provided Russia does not invade Ukraine, the U.S. State Department said.
“It’s better news than what we had yesterday,” said Kyle Rodda, an analyst at IG Markets in Melbourne. “But we’ve seen diplomatic talks go nowhere before, and the troops are still on the border, so risks remain.”
There was slightly less positivity when it came to Asian shares. MSCI’s broadest index of Asia shares outside Japan (.MIAPJ0000PUS) was last down 0.24%, but markets in Tokyo (.N225), Hong Kong (.HSI), Sydney (.AXJO) and Seoul (.KS11) all pared deeper morning losses.
Wall Street had taken a dive overnight, with the S&P 500 (.SPX) dropping 2.1% and the Nasdaq (.IXIC) off 2.9% – while gold shot to an eight-month peak – on renewed U.S. warnings of an imminent Russian invasion. read more
Investors fear a wider war as one of the deepest crises in post-Cold War relations plays out, with Russia wanting security guarantees, including Ukraine’s never joining NATO.
Treasuries likewise gave back some overnight gains, with the benchmark 10-year yield last up two basis points to 1.9877%. Two-year yields also rose two basis points to 1.4902%.
Oil dipped and Brent crude futures were last down 0.6% on Friday at $92.44 a barrel, more than 4% below Monday’s peak, and U.S. crude fell 0.7% to $91.07 a barrel.
RATES RACE
Concern about conflict in Ukraine comes with markets already rattled by a rates outlook that could hold as many as seven Federal Reserve increases in the year ahead.
St. Louis Fed president James Bullard on Thursday reiterated his call for the Fed funds rate to be raised to 1% by July to combat stubbornly high inflation and Fed funds futures price about a 1/3 chance of a 50 bps hike next month to begin. read more
Cleveland Fed President Loretta Mester said the pace of hikes will need to be faster than previous cycles. read more
“Markets have been particularly volatile recently and virtually everyone adjusted their Fed hike calls higher,” said NatWest Markets’ strategist Jan Nevruzi.
“The consensus seems to range between 5 (our view) and 7 (every meeting) hikes and I do believe the right number lays somewhere in between. Given the strong growth trend and elevated inflation, it wouldn’t be too surprising to see a hike at every meeting from now on,” Nevruzi said.
On Friday, Japan reported a fifth straight month of inflation, with energy prices posting their biggest annual rise in 41 years. read more
Elsewhere in currency markets the dollar held its bid and was firm at $1.1363 per euro though the Aussie gained a little in line with the risk-on mood to $0.7201 .
Register now for FREE unlimited access to Reuters.com
Register
Editing by Lincoln Feast and Kenneth Maxwell
Our Standards: The Thomson Reuters Trust Principles.
NEW YORK, Feb 17 (Reuters) – Gold prices jumped to an eight-month high and safe-haven debt rose on Thursday after U.S. President Joe Biden said there was every indication Russia planned to attack Ukraine, while Moscow accused Washington of ignoring its security demands.
A gauge of global equities fell more than 1% despite strong corporate earnings in Europe as the standoff over Ukraine deepened. Russian-backed separatists and Ukrainian forces accused each other of firing shells across a cease-fire line as Britain said Russia sought to fabricate a pretext to invade. read more
In a sign of increasing alarm about Ukraine, U.S. Secretary of State Antony Blinken told the UN Security Council this is “a moment of peril” for the lives and safety of millions of people regarding Russia’s potential invasion of Ukraine. Russia denies planning to invade its neighbour.
Register now for FREE unlimited access to Reuters.com
Register
U.S. and German government bond yields fell, and oil slid as talks entered their final stages to resurrect a 2015 nuclear deal that would allow Iran to resume oil exports to clients such as South Korea. Losses were capped by the growing tension between major energy exporter Russia and the West.
Investors already were looking toward the long weekend with Monday a U.S. holiday when markets will be closed, said Marc Chandler, chief market strategist at Bannockburn Global Forex.
“You as a market participant are not incentivized to be fighting the risk-off mood ahead of the weekend when anything can happen,” Chandler said.
The pan-European STOXX 600 index (.STOXX) fell 0.74% while MSCI’s gauge of stocks across the globe (.MIWD00000PUS) shed 0.85%.
On Wall Street, the Dow Jones Industrial Average (.DJI) fell 1.19%, the S&P 500 (.SPX) lost 1.18% and the Nasdaq Composite (.IXIC) dropped 1.47%.
Asia MSCI’s broadest index of Asia-Pacific shares (.MIAP00000PUS) eked out a 0.15% rise.
Worries about a super-hawkish Federal Reserve rate-tightening campaign eased overnight after minutes of its latest policy meeting signaled a measured, even dovish stance. read more
Ukraine concerns led investors to buy government debt. Yields on the U.S. 10-year Treasury note dropped 8.2 basis points to 1.963%, while yields on Germany’s 10-year government bond slid 0.2 basis points to 0.229%.
The Russia-Ukraine crisis has unnerved investors who also must monitor the Fed and efforts by other central banks to fight soaring global inflation.
“There’s a lot of confusion right now and everybody’s crystal ball is pretty cloudy,” said George Mateyo, chief investment officer at Key Private Bank, speaking of both of Ukraine and how the Fed might tighten monetary policy.
The U.S. economy has weathered COVID-19’s hit on the economy well, with GDP and corporate earnings at peak levels, which bodes well for the market, he said.
“It’s going to be a challenging year, but not a dire year,” Mateyo said. “Expect some volatility this year, but don’t abandon risk altogether, don’t get super defensive. There’s a lot of missed opportunities inside the market.”
Spot gold added 1.5% to $1,895.77 an ounce after rising close to the key $1,900 mark.
Gold price
Oil prices fell more than 2% before easing. U.S. crude futures fell 1.56% to $92.20 per barrel and Brent was at $93.30, down 1.59% on the day.
The dollar , also regarded as a safe haven, initially rose against most currencies but gains subsided and the greenback was later marginally lower – a sign investors were not yet panicking about the Russia-Ukraine tensions.
However the Japanese yen, a currency investors often buy as a safe-haven, hit its strongest since Feb. 7.
The dollar index fell 0.058% as the yen strengthened 0.42% at 114.98 per dollar.
The euro down 0.06% to $1.1366.
Bitcoin last fell 4.62% to $42,047.23.
Register now for FREE unlimited access to Reuters.com
Register
Reporting by Herbert Lash, additional reporting by Tommy Wilkes in London, Kevin Buckland and Selena Li in Tokyo; Editing by Kim Coghill, Kirsten Donovan and Barbara Lewis
Our Standards: The Thomson Reuters Trust Principles.