Traders brace for wild markets after Russia sanctions stepped up

Traders brace for wild markets after Russia sanctions stepped up

Bloomberg: Traders braced for further turmoil as global markets kicked off Monday in Asia amid the growing financial fallout from Russia’s assault on Ukraine and the West’s response via sanctions.

The Russian ruble will be in focus, along with potential currency havens such as the US dollar, which climbed against the euro and risk-sentiment proxies such as the Australian dollar.

Hard-currency bonds from Russia and Ukraine will closely be watched following credit-rating cuts by major assessors late Friday, as will a swath of global markets from oil and wheat to Treasuries and bank stocks.

“Safe havens will likely remain bid in the current environment,” said Geoffrey Yu, senior strategist for EMEA Markets at BNY Mellon. “In currencies, we note that last week the yen and Swiss franc did not materially outperform, so we would just focus on dollar demand for the time being.”

The US and its European allies stepped up their response to the escalating conflict as Vladimir Putin ordered Russia’s military advance to proceed, announcing plans to sanction the central bank in Moscow and cut off various Russian lenders from the critical SWIFT financial messaging system. That comes on top of earlier moves against the country’s biggest banks and restrictions on the nation’s bonds.