(Bloomberg) — European stocks fluctuated as traders questioned the prospects for a diplomatic meeting between President Joe Biden and his Russian counterpart Vladimir Putin.
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The Stoxx Europe 600 index was little changed, erasing a gain of 0.4% at the open, after the Kremlin said there are “no concrete plans” yet for a summit between the Russian and U.S leaders. Contracts on the S&P 500 and Nasdaq 100 were slightly positive.
Markets are being whipsawed by Russia’s troop buildup near Ukraine and efforts at diplomacy to bring both sides back from the brink of war. France said its proposal for a summit was accepted in principle by Biden and Putin. U.S. officials said the meeting would only occur if Russia doesn’t invade Ukraine, while Russia has said repeatedly it has no plans to do so.
The dollar dipped and Russia’s ruble gained. Brent crude futures were steady around $94 a barrel.
Earlier, the U.S. told allies that a Russian invasion of Ukraine could target multiple cities beyond the capital, Kyiv. Biden said Friday he’s convinced Putin has decided to move against Ukraine. U.S. Secretary of State Antony Blinken and Russian Foreign Minister Sergei Lavrov are due to meet this week.
The Ukraine standoff, along with the worry that tightening Federal Reserve monetary policy could choke growth in the world’s biggest economy, raise the likelihood of more swings in markets in an already volatile year.
“Global data and central banks’ stance on tightening are all taking a back seat to Ukraine, with markets nervously awaiting the next headline,” said Su-Lin Ong, head of Australian economic and fixed-income strategy at Royal Bank of Canada. “Thinner liquidity because of the U.S. holiday adds to the anxiety.”
Fed Policy
Key Federal Reserve officials at the end of last week backed raising interest rates in March to curb the hottest inflation in 40 years.
The remarks on Friday by Governor Lael Brainard and New York Fed President John Williams, as well as Chicago Fed chief Charles Evans, showed officials eager to get tightening under way, without seeking a supersized interest-rate hike or a move before the next scheduled meeting.
Bets on an aggressive, 50 basis-points Fed liftoff next month have diminished. The Fed’s key inflation metric may have accelerated to a fresh four-decade high in January, data this week is expected to show.
Here are some events to watch this week:
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Russia’s Foreign Minister Sergei Lavrov has agreed to meet U.S. Secretary of State Antony Blinken this week in Europe
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Fed Governor Michelle Bowman speaks Monday
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China property prices, loan prime rates Monday
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New Zealand rate decision Wednesday
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BOE Governor Andrew Bailey appears before the Treasury Committee Wednesday
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Bank of Korea policy decision Thursday
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EIA crude oil inventory report Thursday
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Fed officials Loretta Mester and Raphael Bostic speak Thursday
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U.S. new home sales, GDP, initial jobless claims Thursday
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U.S. consumer income, U.S. durable goods, PCE deflator, University of Michigan consumer sentiment Friday
Some of the main moves in markets:
Stocks
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Futures on the S&P 500 rose 0.2% as of 4:56 a.m. New York time
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Futures on the Nasdaq 100 were little changed
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Futures on the Dow Jones Industrial Average rose 0.2%
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The Stoxx Europe 600 fell 0.2%
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The MSCI World index was little changed
Currencies
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The Bloomberg Dollar Spot Index fell 0.2%
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The euro rose 0.3% to $1.1359
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The British pound rose 0.3% to $1.3633
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The Japanese yen rose 0.1% to 114.86 per dollar
Bonds
Commodities
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West Texas Intermediate crude rose 0.4% to $91.46 a barrel
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Gold futures fell 0.1% to $1,897.20 an ounce
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