Good morning and welcome to our ongoing coverage of the world economy, financial markets, the eurozone and the economy.
The deepening Ukraine crisis has stalled global inventories and sent crude oil soaring. Last night, Russian President Vladimir Putin ordered his military to invade Russian-controlled areas in south-eastern Ukraine. In a long televised speech, he recognized the Donetsk and Luhansk regions as independent states.
Washington, European and other countries have condemned the move and threatened harsh sanctions.
Boris Johnson is chairing a meeting of Britain’s Cobra emergency committee this morning to sign off on a package of sanctions against Russia. The first indications were that the package would target “those complicit in violating Ukraine’s territorial integrity”.
For more information, see our live blog on the Ukraine crisis.
A hot day is ahead for the financial markets. In Asia, Japan’s Nikkei fell 1.7%, Hong Kong’s Hang Sing 2.9%, Shanghai Composite Index just over 1% and South Korea’s Kospi 1.35%.
The European and US markets are also set for heavy losses at the opening bell.
In the oil markets, Brent crude is marching towards $100 a barrel amid supply fears. It is up more than $2, or 2.2%, to $97.51 a barrel, while US light oil is up $3.60 to $94.67 a barrel, up nearly 4%.
Viktor Szabo, portfolio manager for emerging markets at abrdn in London, told Reuters last night:
To say it’s going to be an ugly day is probably an understatement [on the markets]. I was hoping we wouldn’t come here, but this is a significant step.
Russian markets were still trading when Putin announced his decision on live TV following phone calls with the leaders of Germany and France.
The ruble fell 3.3%, slipping above 80 against the dollar, while Moscow’s stock markets plummeted to their lowest level in over a year. The dollar-denominated RTS index ended the day 13.2% lower, while the ruble-based Russian MOEX index lost 10.5%.
- 09:00 GMT: Ifo Business Climate Survey Germany (Forecast: 96.5)
- 09:00 GMT: Final inflation in Italy for January (forecast: 4.8%)
- 10.45am GMT: Bank of England Deputy Governor Dave Ramsden delivers a speech
- 11am GMT: CBI Industrial Trends Survey for February
- 2pm GMT: US house prices for December
- 14:45 GMT: US Markit PMIs for February (Manufacturing, Services and Composite)
- 3pm GMT: US February Consumer Confidence (exp: 110)