(Bloomberg) — European stocks and U.S. equity futures slumped as the standoff over Ukraine hardened, weakening hopes for peace talks with Vladimir Putin. Russian stocks sank the most since the 2008 global financial crisis, and the ruble weakened a third straight day.
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The Stoxx Europe 600 index fell to its lowest intraday level since October. Nasdaq 100 and S&P 500 futures retreated, while the cash equities market was shut for a U.S. holiday. The MOEX Russia Index plunged as much as 14%.
Investors sold stocks after the Kremlin said there are “no concrete plans” for discussions between Putin and U.S. President Joe Biden. The Russian president said he may seek official recognition for separatists in Ukraine, which might escalate tensions.
Futures on 10-year U.S. Treasuries rose, suggesting renewed haven demand; the notes themselves aren’t trading Monday because of the U.S. holiday. Crude oil futures rose.
Gazprom PJSC and Sberbank PJSC were among the biggest drags on the MOEX Russia Index, falling more than 10% each.
The Ukraine standoff coupled with 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.”
Bets that the Fed will begin its tightening campaign in March with a bigger-than-usual rate boost of 50 basis points have diminished as the Ukraine situation has worsened.
The Fed’s key inflation metric may have accelerated to a fresh four-decade high in January, data this week is expected to show, bolstering the case for higher interest rates.
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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The Stoxx Europe 600 fell 0.9% as of 10:25 a.m. New York time
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Futures on the Nasdaq 100 fell 1.1%
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Futures on the Dow Jones Industrial Average fell 0.5%
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The MSCI Asia Pacific Index fell 0.5%
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The MSCI Emerging Markets Index fell 1%
Currencies
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The Bloomberg Dollar Spot Index fell 0.1%
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The euro rose 0.1% to $1.1328
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The Japanese yen rose 0.1% to 114.89 per dollar
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The offshore yuan was little changed at 6.3269 per dollar
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The British pound rose 0.1% to $1.3607
Bonds
Commodities
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WTI crude oil rose 1% to $92.01 a barrel
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Spot gold fell 0.2% to $1,894.28 an ounce
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