In Asian Equity Markets stocks fell while safe-havens rallied and oil rose on Tuesday as Europe’s eastern flank stood on the brink of war after Russian President Vladimir Putin ordered troops into breakaway regions of eastern Ukraine. MSCI’s broadest index of Asia Pacific shares outside Japan was on course for its worst day for this month, off 2.1 percent, weighed by markets in Hong Kong and mainland China. Japan’s Nikkei shed 2.5 percent. In Hong Kong, shares of Russian aluminium producer OK Rusal plunged as much as 22.1 percent to HK$6.18, their biggest daily percentage decline since April 2018.
In Currency Markets the safe-haven yen hit a near three-week high and the euro touched a one-week low in Asia trade on Tuesday as Russia ordered troops into breakaway parts of eastern Ukraine and the West vowed sanctions in response. The yen edged about 0.2 percent higher to 114.50 to the dollar in early trade, before retreating slightly, while the euro fell about 0.1 percent to $1.1297. The Swiss franc, another safe-haven, hit a one-month high on Monday. The Australian dollar was last up about 0.2 percent at $0.7205. The kiwi last up 0.2 percent at $0.6714.
In U.S., Equity Markets were closed in observance of Presidents’ Day.
In Commodities Markets oil prices rose more than $2 to a fresh seven-year high on Tuesday after Moscow ordered troops into two breakaway regions in eastern Ukraine, escalating a crisis that western leaders have warned could spark a war. Brent crude futures rose 2.2 percent, to $97.49 a barrel, adding to a 2 percent gain on Monday. U.S. WTI crude futures rose 3.6 percent, to $94.32 a barrel versus Friday’s settlement. Spot gold fell 0.2 percent to $1,895.06 per ounce. Silver fell 0.3 percent to $23.90 per ounce, platinum inched up 0.6 percent to $1,074.17, and palladium was up 0.8 percent to $2,364.71.
In European Equity Markets stocks rose on Monday, tracking signs of relief in global markets, on investor hopes of a resolution to the Ukraine crisis after U.S. and Russian leaders reportedly agreed in principle to holding a summit on the issue. The pan-European STOXX 600 rose 0.6 percent, tracking a risk-on tone in markets after U.S. President Joe Biden and his Russian counterpart Vladimir Putin agreed in principle to a summit over Ukraine, French President Emmanuel Macron said on Monday, offering a possible path out of one of the most dangerous European crises in decades.
In Bond Markets euro zone government bond yields crept up on Monday after the United States and Russia agreed in principle to a summit over Ukraine, while a key gauge of business activity supported the case for a hawkish shift at the European Central Bank. German Bund yields rose 1 bps to 0.21 percent, above a one-week low touched briefly at around 0.19 percent. Most other 10-year yields were around 1-2 bps higher on the day. Italy’s 10-year bond yield was last up 3 bps on the day at 1.88 percent.