The Moscow Exchange or “Moskvabörsen” temporarily disabled trading in Russian stocks this morning as President Vladimir Putin ordered a “special military operation” in Ukraine. Trading resumed in the Russian stock market at 10:00 a.m. local time.
Russia could be removed from the SWIFT system
The tremor, however, is not limited to Moex stocks. The global financial markets have also been riling up as Russia launched a full-scale invasion of Ukraine. Stoxx 600 is down more than 3.0% at present, DAX 4.0%, while the Asian-Pacific equities are also in the red.
The military conflict could see Russia removed from the SWIFT system with more “substantial sanctions” expected as the United States continues to work with Europe to hold Russia accountable.
The U.S. indices opened down on Thursday but have started recovering the intraday losses at the time of writing.
Impact on inflation and the global economy
The U.S. sees Russia’s breach of the diplomatic standoff as an “act of war” that could potentially hit the global economy, turning inflation into a more lasting headwind as it worsens supply challenges and fuels energy prices. As per UBS Global Wealth Management’s Mark Haefele:
Heightened volatility on the escalation of the conflict shows markets had not fully priced in the likelihood of deeper conflict. We expect continued volatility in the near-term as leaders calibrate and announce their response to this escalation.
Oil prices are up significantly on Thursday with Brent Crude currently at $104 a barrel – the highest it has been since 2014. WTI Crude is also up more than 6.0% on its way to hitting $100 a barrel.
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