West Plans Further Sanctions Against Russia – Stocks Halt
On Monday, global stock markets began cautiously talking about sanctions against Russia over its invasion of Ukraine. Part of the careful observation of the U.S. yield curve heightened concerns about the recession. Germany said the West would impose more sanctions on Russia in the coming days after Ukraine exposed Russian forces to war crimes after the death of civilians near Kyiv.
According to the chief investment officer of UBS Global Wealth Management, more sanctions will intensify Russia’s already tremendous economic pressure after the conflict in Ukraine. This is the primary driver of the near future. The STOXX 600 was open an hour and a half later. Shares of S&P 500 and Nasdaq fell about 0.1%. MSCI’s broadest Asia-Pacific stock index outside Japan rose 1%. Chinese markets on the mainland were closed.
Last week, the rise in stock markets was because investors had small alternatives to buying stocks. According to the German Defense Minister, the European Union should consider banning the import of Russian gas. This move is likely to increase prices further.
Oil traded above $105 a barrel on Monday. Concerns over the Ukraine war were by supply constraints and the lack of an Iranian nuclear deal, while countries are releasing oil from strategic reserves.
Stocks and Sanctions Against Russia
Oil prices fell 13% last week. This is the most significant weekly drop in the previous two years. After that, U.S. President Joe Biden announced it as the most crucial output of U.S. oil reserves. Meanwhile, in fixed-income markets, the yield curve between two-year and 10-year U.S. denominations, widely seen as a signal of an incoming economic contraction, reversed. Last March, a strong performance report supported the Federal Reserve’s view to behave aggressively.
Several Fed officials are due to appear at public events this week to send more signals, and the minutes of the latest policy meeting are expected Wednesday. Two-year revenue was 2.44%. This is close to the maximum from March 2019 onwards. The benchmark 10-year income was 2.38%.
The dollar index was last unchanged at 98.59; It recently exploded from 97,681 to 99,377. The recent jump in U.S. bond yields has supported the U.S. dollar, especially against the yen. The Bank of Japan has repeatedly acted to keep its bond yields close to zero over the past week. The dollar traded at 122.60 yen, Not too far from its last seven-year peak of 125.10. The euro traded at $1.1037, down 0.1% overall. Analysts fear that the currency will fall further if the E.U. tightens sanctions on energy imports from Russia.