As Ukraine risks rise, crude prices rise and the rouble falls to a record low

On Monday, crude oil rose while the rouble fell nearly 30% to a new record low after Western nations imposed new sanctions on Russia for its invasion of Ukraine, including the exclusion of some banks from the SWIFT international payments system. Bond yields rose along with the dollar and yen, while the euro fell after Russian President Vladimir Putin placed nuclear-armed forces on high alert on Sunday, the fourth day of the biggest assault on a European state since World War II.

The escalation of tensions raised concerns that oil supplies from the world’s second-largest producer could be disrupted, sending Brent crude futures up $4.21, or 4.3 percent, to $102.14. West Texas Intermediate (WTI) crude futures in the United States were up $4.58, or 5.0 percent, to $96.17 per barrel. U.S. and European stock futures fell, but Asia-Pacific stocks rose in volatile trading, buoyed by Wall Street gains from Friday, when the S&P 500 closed up 2.51%, according to Kyle Rodda, a market analyst at IG Australia.
“Over the weekend, we had a deluge of very negative information,” Rodda said. “My sense is that there won’t be much staying power behind this particular move (in Asia-Pacific stocks), given the risks to financial stability and the threat of nuclear war.” “Volatility has increased,” he said. “The price action is extremely choppy.” At the start, U.S. emini stock futures were pointing to a 1.57 percent drop, while pan-European EURO STOXX 50 futures were down 2.83 percent.

The Nikkei 225 (.N225) in Japan rose 0.48 percent, recouping a previous loss. Australia’s benchmark (.AXJO) rose 0.64 percent after initially falling. However, Chinese blue chips (.CSI300) fell 0.21 percent. The MSCI regional stock index (.MIAP00000PUS) gained 0.09 percent. Meanwhile, the 10-year US Treasury yield fell by about 6 basis points to 1.92 percent, while equivalent Australian yields fell by about 6 basis points to 2.18 percent. The euro fell 0.9 percent to $1.1170 and 0.87 percent to 129.065 yen, while the riskier Australian and New Zealand dollars fell 0.66 and 0.76 percent, respectively. The rouble fell 29.37 percent to a record low of 119 rubles per dollar.