European equities rose with US futures on Wednesday as investors assessed limited initial Western sanctions against Russia amid the Ukraine stand-off.
The Stoxx 600 Europe Index and S&P 500 futures both added around 0.8 per cent, while contracts on the Nasdaq 100 gained more than 1 per cent. The mood was brighter than Tuesday, when the S&P 500 fell into a technical correction after sliding 10 per cent from a January peak.
US President Joe Biden said Russia had started to invade Ukraine and announced steps targeting Russia’s sale of sovereign debt abroad, its elites, and a pair of banks. The sanctions — and others by US allies — stopped short of sweeping measures, though officials warned they could be scaled up. “The softer-than-feared sanctions somewhat help lifting the mood,” Ipek Ozkardeskaya, senior analyst at Swissquote, wrote in a note, adding, “The risk appetite is limited, of course, except in some key assets, including oil and commodities.”
Treasuries extended declines after the yield curve flattened in the Wall Street session. Crude oil fluctuated, while gold dipped as haven demand eased. The dollar slipped.
Fears that the Ukraine tension could snarl commodity supplies has bolstered everything from energy to wheat and nickel. Oil paused a blistering rally after the measures against Russia were announced, with Brent crude trading at $96 a barrel after a jump on Tuesday that saw it climb to a 15-year high.
A key question is whether or not the jump in raw material costs stirred by the stand-off will spur more aggressive central bank policy. Bets on the number of rate increases by the US Federal Reserve in 2022 have settled at around six 25-basis-point hikes, down from seven on February 11.
For the European Central Bank (ECB), swaps suggest the first quarter-point move will take place by October, compared with September earlier in the month.
Dear Reader,
Business Standard has always strived hard to provide up-to-date information and commentary on developments that are of interest to you and have wider political and economic implications for the country and the world. Your encouragement and constant feedback on how to improve our offering have only made our resolve and commitment to these ideals stronger. Even during these difficult times arising out of Covid-19, we continue to remain committed to keeping you informed and updated with credible news, authoritative views and incisive commentary on topical issues of relevance.
We, however, have a request.
As we battle the economic impact of the pandemic, we need your support even more, so that we can continue to offer you more quality content. Our subscription model has seen an encouraging response from many of you, who have subscribed to our online content. More subscription to our online content can only help us achieve the goals of offering you even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practise the journalism to which we are committed.
Support quality journalism and subscribe to Business Standard.
Digital Editor
RECOMMENDED FOR YOU