All major global market indexes have been affected due to the Russian attack on Ukraine
LONDON:
Russia launched a full-blown invasion of Ukraine this week, sparking a flurry of sanctions and turmoil in global financial markets.
Here are six charts showing the strong movements of the week in financial markets:
ENERGY SURGE
Concerns about possible supply disruptions in the oil market from the war in Ukraine sent crude prices above $100 a barrel for the first time since 2014, with Brent hitting $105. UK and Dutch gas prices jumped about 40%-50% on Thursday. With both crude oil and gas prices falling on Friday, the market remains volatile.
While a series of harsh sanctions imposed by Western capitals do not specifically target Russian oil and gas flows, top Russian oil buyers are struggling to secure reassurance. secure at Western banks or find ships carrying crude oil from the country.
Russia is the world’s second-largest producer of crude oil and supplies about 35% of Europe’s natural gas supplies and 50% of Germany’s.
FEELING INFLATION
Rising energy prices spur a hit to inflation-linked bonds — securities whose payouts rise with inflation.
That has left real yields – the cost of borrowing after adjusting for inflation – significantly lower, while the so-called breakeven rate, which indicates where the market sees future inflation, has risen. strong.
Essentially, that implies that central banks may have to go slower than previously forecast with rate hikes to combat inflation as economic growth also takes a hit.
Yields on Treasury Inflation Protected Securities (TIPS) are rate-sensitive to declines while breakouts are up 3% over the past week. In Germany, vulnerable to soaring European gas prices, two-year real yields fell by about 30 bps and broke higher with 3.7% of TIPS funds receiving their first net inflows in 5 weeks, BofA data shows.
STOCK MARKET: CARING BEARS
Thursday’s market performance has wiped out nearly $1 trillion in value from global stock markets and accelerated the decline in major indexes this year as investors begin to worry about futures losses. a major interest rate hike by the central bank.
The US tech Nasdaq has flirted with “bear” market territory, as a 20% drop from its last known peak, but US markets ended up closing higher despite it all. losses elsewhere and is bullish on Friday.
Europe’s 3.3% drop for the STOXX 600 reversed its recent 10%, but then it rallied just as much on Friday.
Meanwhile, the MSCI 24-country emerging markets index earned its “bear” market tag as a 4.3% drop on Thursday left the index down just over 20% from its recent record high. exactly a year ago.
RUSSIA ROAD
Predictably, the Russian stock market was hit the hardest on Thursday. Moscow’s MOEX exchange fell a record 33% after dropping more than 1,000 points in a period as traders braced for tough sanctions. Russia’s MSCI index fell 38%. Analysts estimate that it was one of the top three stock market crashes of all time.
Beverage Cherry Blossom
Ukraine was also hit hard. The country’s currency and government bonds have collapsed violently, with investors wondering if the country can avoid another sovereign default.
SOARING WHEAT AND GRAINS
Wheat prices hit their highest levels since mid-2008 as markets try to gauge the consequences for grain and oilseed supplies from the conflict between Russia and Ukraine – two of the biggest exporters. world.
Supply disruptions from the Black Sea region will put pressure on prices and continue to drive food inflation at a time when affordability is a major concern globally following the economic damage caused by the COVID pandemic. -19 caused.
Ukraine’s military on Thursday suspended commercial shipping at its ports after Russian forces invaded the country. Previously, Russia ordered the Sea of Azov to be closed to the passage of commercial ships until further notice, but left Russian ports in the Black Sea open to navigation.
