Stocks Drop as Traders Alarmed by Russia-Ukraine War – Europe Market Wrap
Stocks fell, with European stocks down about 1%, while global bonds rose on concerns about the latest escalation in Russia’s war against Ukraine.
S&P 500 futures fell 0.4%. The yield on 10-year Treasuries declined 5 bps, to 4.36%. The movements were more pronounced in Europe, with German bond rates falling to their lowest level since October. The Euro fell 0.3%. Poland’s major stock index fell 2.5 percent.
Markets were rocked by reports that Ukrainian military had launched their first strike on a Russian border territory with Western-supplied ATACMS missiles. Earlier, President Vladimir Putin approved a new nuclear policy that widens the parameters under which Russia can deploy nuclear weapons, even in reaction to a significant conventional strike on its territory. Putin promised in September to alter the doctrine.
Traditional safe-haven investments such as the Japanese Yen, Swiss Franc, and gold all gained value. Ukraine’s sovereign Dollar bonds fell the highest among emerging-market peers, with a note due in February 2029 losing 1.6 cents to the Dollar.
Natural-gas futures rose as much as 1.1%, hovering around their year-highs. Gold was up 0.9% to $2,635 per ounce. Oil traders, meanwhile, were unconcerned by the recent developments, with prices plummeting as Europe’s largest oil field gradually resumed operations following a power outage.
