Introduction: Markets in turmoil as Russia invades Ukraine
As investors pile into safe-haven assets, the yields on eurozone government bonds have fallen sharply (the return to an investor from the bond’s coupon, interest, payments).
Investors are buying German 10-year bonds, the benchmark in Europe, pushing the yield down to 1.139%, the lowest in three weeks. Most other 10-year bond yields in Europe are also down.
Michael Hewson, chief market analyst at CMC Markets UK, said:
It’s probably not hyperbole to say that Europe is now at its most dangerous juncture since World War 2.
Gold, a traditional safe haven investment, has gained 1.8% to $1,941 an ounce, while silver prices have jumped 2.3% to $25.08 an ounce.
The UK also also threatened “unprecedented” sanctions against Russia.
UK junior minister James Cleverly told Sky News:
We will be bringing forward …. in close concert with our international friends and allies, an unprecedented sanctions response, coordinated sanctions response, to punish this appalling decision.
Good morning, and welcome to our rolling coverage of the world economy, the financial markets, the eurozone and business.
Oil prices have broken through $100 a barrel and global stocks are plunging, after Russian forces invaded Ukraine.
Vladimir Putin ordered a “special military operation” at dawn, amid warnings from world leaders that it could spark the biggest war in Europe since 1945. Within minutes of Putin’s short televised address, at about 5am Ukrainian time, explosions were heard near major Ukrainian cities, including the capital Kyiv.
The United States and its allies will impose “severe sanctions” on Russia, US president Joe Biden said.
Oil prices jumped more than 6% and Brent crude went through $100 a barrel for the first time since mid-2004. It touched $103.32 a barrel, the highest since August 2014, while US light crude soared to $97.51 a barrel, up $5.4.
The rouble hit a record low of 89.60 against the dollar, and the Moscow stock exchange remains temporarily suspended, but is due to reopen at 10am GMT. Russian sovereign dollar bonds are selling off, with the bond maturing in 2029 down more than 15 cents to a record low of 72.5 cents.
Asian stocks tumbled, with Japan’s Nikkei losing 1.8% and Hong Kong’s Hang Seng and the Singaporean exchange falling more than 3%.
European stock futures point to sharp losses when bourses over here open at 8am GMT. Euro Stoxx 50 futures are down 4.7%, German Dax futures are more than 5% lower and FTSE futures have fallen 3%.
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