Germany has hit back at the idea of targeting Russian oil and gas with new sanctions, warning such a move could “threaten the social peace”.
Economy Minister Robert Habeck said he wouldn’t support an embargo on Russian imports and would “even speak out against it” given his country’s heavy reliance on the supplies.
Western nations have rolled out a raft of sanctions against the Kremlin, but refrained from targeting oil and gas amid fears such a move could drive prices up even further.
Mr Habeck, former leader of the Green Party, said Europe urgently needed to reduce its reliance on Moscow for energy supplies as the war in Ukraine threatens to upend the market – a transition backed by the International Energy Agency earlier today.
03:05 PM
Ukraine ‘plans second war bond’ to fund army
Ukraine is reportedly planning to auction another war bond next week to raise money for its army and its resistance to Russia’s invasion.
The government will use its regular Tuesday slot for what it calls “military bonds”, Bloomberg reports. The finance ministry said it will communicate with investors in due course about further bond auctions.
Ukraine raised 8.1bn hryvnia (£202m) in its first auction earlier this week, when it invited citizens, businesses and foreign investors to purchase bonds to fund the military.
According to the report, the proceeds will go towards humanitarian aid including clothes and footwear, blankets and hospital beds. They’ll also fund protective gear such as helmets and bulletproof vests, as well as communication equipment and laptops.
02:51 PM
M&G: We won’t make any more investments in Russia
M&G has said it won’t be won’t any further investments in Russia for the foreseeable future “in light of the gravity of the events in Ukraine”.
The investment manager said it’s working hard to address existing exposure to the Russian market, but said this accounted for less than 0.04pc of assets.
Chief executive John Foley said:
Over the coming weeks, where it is practically possible and appropriate, we will be looking at options to reduce our holdings while being mindful of our duty to clients and broader stakeholders.
02:37 PM
Wall Street pushes higher on banking boost
Wall Street has started trading in positive territory, boosted by banking and tech stocks after Fed chair Jerome Powell hinting at a rise in interest rates despite the Ukraine war.
The S&P 500 and Dow Jones opened 0.3pc and 0.2pc respectively, while the tech-heavy Nasdaq rose 0.6pc.
02:26 PM
Plane software maker Sabre ditches Aeroflot
American airline software maker Sabre said it’s terminated its distribution agreement with Russian airline Aeroflot in the latest blow to the country’s aviation sector.
Sabre said it was taking “immediate steps” to remove the government-backed carrier’s flight content from its global distribution system, a marketplace used by travel agencies and corporations to make flight reservations.
It’s the latest company to cut ties with Russian firms amid a wave of sanctions against Moscow.
Russia’s airlines have been particularly badly hit. Planes are banned from flying in UK and EU airspace, while hundreds of jet leases are set to be axed due to sanctions.
Earlier today the Government said companies in the aviation and space sectors would be blocked from London’s insurance market.
02:12 PM
UK needs ‘solid case’ to sanction oligarchs
Britain must have a solid legal case before slapping sanctions on individuals, a Government spokesman said, as pressure mounts for a crackdown on Russian oligarchs.
Calls are growing for tougher measures against billionaires including Roman Abramovich in the wake of Russia’s invasion of Ukraine. The UK has sanctioned 12 individuals so far, lagging behind the EU’s actions.
Prime Minister Boris Johnson’s spokesman said the Government had to make sure there were solid legal grounds before moving against individuals, but insisted Britain was not being held back.
Earlier today the Times reported that the UK could take weeks or months to build a case for sanctions against oligarchs.
Mr Abramovich has confirmed he’s selling Chelsea FC, while he’s also launched a fire sale of his London property empire as the backlash against wealthy Russians mounts.
01:54 PM
US jobless claims fall again
The number of Americans filing new claims for unemployment benefits fell by more than expected last week, while layoffs declined sharply in February, in the latest sign the US labour market is recovering well.
Initial claims for state unemployment benefits dropped 18,000 to 215,000 for the week ending February 26, the Labor Department said.
It marks the second consecutive weekly decline in claims, with businesses holding on to their workers amid a near-record number of job openings.
01:42 PM
Crypto firms told to comply with sanctions amid ‘loophole’ fears
Cryptocurrency companies have been told to step up their efforts to enforce sanctions on Russia amid Treasury concerns that the novel financial technology could be used to evade the measures.
James Titcomb has more:
The Financial Conduct Authority said it was “actively monitoring” cryptocurrency brokerages to ensure they were enforcing sanctions on Russia’s elite.
Meanwhile the British industry body CryptoUK has written to companies urging them not to become “a loophole for sanctioned Russians”.
The FCA, Treasury and MPs have held talks with cryptocurrency representatives in recent days, while the White House is believed to be assessing new measures to ensure wealthy Russians are not able to divert their riches through cryptocurrencies.
An FCA spokesman said: “As you would expect, we have reached out to each crypto firm registered with us to ensure that they are aware of sanctions and their responsibilities. We are working with partners to actively monitor these firms.
“We have made it clear to crypto firms, banks and others that we expect them to focus on their sanction controls and, with our partners, we will be supervising their actions.”
01:00 PM
Ukraine delays interest rate decision
Ukraine’s central bank has delayed its scheduled decision on interest rates as Russia’s invasion entered its second week.
The National Bank of Ukraine said the key rate remained at 10pc, adding it remained committed to curbing inflation and will resume normal monetary policy meetings once the economy returns to normal.
Governor Kyrylo Shevchenko said Ukraine had so far received international aid of around $15bn (£11.2bn), a third of which will go to the state budget.
The bank said: “After Ukraine is freed from Russian invaders and the economy is back to operating according to market-driven principles, the NBU will return to its traditional inflation-targeting mode with a floating exchange rate.”
12:37 PM
UK to consider ‘all options’ on Russia energy sanctions
The Government has said it will consider all options when it comes to potential sanctions targeting Russia’s energy sector.
Boris Johnson’s spokesman told reporters the UK wants to “wean” itself off Russian gas, adding “we will have more to say shortly”.
He added:
All European countries recognise that we need to move away from that. Clearly ending our oil and gas imports from Russia in silo and moving unilaterally could simply push up global gas prices further, which would affect UK citizens, and that’s not what we want to do, so we want to move in concert with our EU allies on this.
12:28 PM
Gazprom kicked out of London offices
Gazprom’s energy trading arm is being kicked out of its offices in central London, piling even more pressure on the Kremlin-controlled firm in the wake of Russia’s invasion of Ukraine.
British Land plans to end its rental contract for the offices of Gazprom Marketing & Trading as soon as possible, Bloomberg reports.
The lease on the top floors of 20 Triton Street near Regent’s Park was scheduled to end in 2025.
British Land said: “This is a fast-moving, complex situation, and we will continue to review all measures that are available to us, while remaining fully compliant with sanctions requirements.”
It’s the latest blow for Gazprom amid mounting sanctions against Moscow. British Gas owner Centrica this week said it was axing its gas supply agreement with the company.
12:12 PM
US futures fall back as commodities surge
Wall Street is set to fall alongside European stocks as traders weigh the impact of surging commodity prices on inflation and economic growth.
Futures tracking the S&P 500 dipped 0.1pc, while the Nasdaq was down 0.3pc. The Dow Jones was little changed.
Turmoil is continuing across global markets today as Russia’s war against Ukraine enters its second week. Mining and energy stocks are bucking the trend as oil, gas and metals prices continue to surge.
The FTSE 100 has now extended its fall, sliding 0.7pc into the red.
12:03 PM
UK asks Facebook and TikTok to block access to RT
Culture minister Nadine Dorries has written to Facebook and Tik Tok to ask if they could prevent access to Russian state-owned television network RT in Britain.
Speaking in the House of Commons, Ms Dorries said: “I was very glad to see yesterday that the channel is now officially off air on British televisions after it was shut down and Sky, Freeview and Freesat.”
“I’ve written to Meta and Tik Tok asking them to do everything that they can do to prevent access to RT in the UK, as they’ve done in Europe.”
RT disappeared from British screens yesterday following a ban imposed by the EU, which impacted satellite providers used by Sky, Freeview and Freesat.
11:45 AM
IEA: EU can cut reliance on Russian gas by a third in one year
The EU can reduce its dependence on Russian natural gas by a third in just one year by ramping up renewables and seeking alternative sources.
That’s according to the International Energy Agency, which has published a 10-point plan to cut ties with Moscow.
Measures outlined in the plan include avoiding any new gas contracts with Russia, increasing use of nuclear power and replacing gas boilers with heatpumps.
IEA executive director Fatih Birol said:
Nobody is under any illusions anymore. Russia’s use of its natural gas resources as an economic and political weapon show Europe needs to act quickly to be ready to face considerable uncertainty over Russian gas supplies next winter.
The EU needs to act quickly to reduce its reliance on Russian natural gas@IEA’s 10-Point Plan shows how the EU can cut gas imports from Russia by over a third in a year while supporting the transition to clean energy in a secure & affordable way
More ➡️ https://t.co/Z6rFD9e0fw pic.twitter.com/wUK0J0eNZ6
— Fatih Birol (@fbirol) March 3, 2022
11:28 AM
Gas prices fall after closing in on €200
It’s been a turbulent day for gas prices. After surging to an all-time high, they’ve reversed gains just as quickly.
The European benchmark was trading 3.8pc lower at €159 a megawatt-hour after climbing to almost €200 for the first time ever. The UK equivalent fell 4.6pc.
The price swings come amid heightened worries about how the war in Ukraine will affect supplies to Europe.
Energy prices were already surging amid a squeeze on inventories, but the conflict and ensuing sanctions threaten to deepen the crisis even further.
While oil and gas have so far remained immune from western sanctions, many traders are opting not to do business with Kremlin-controlled firms such as Gazprom.
11:23 AM
OneWeb suspends satellite launches after Russia threat
OneWeb has said it’s suspending all launches from Russia’s Baikonur Cosmodrome in Kazakhstan after Moscow took 36 satellites hostage in a stand-off over the war in Ukraine.
Roscosmos, the Russian state space agency, said it was refusing to go ahead with a scheduled launch of the satellites tomorrow unless the Government sells its stake in OneWeb and it receives assurances that the business is not used for military purposes.
The Government, which teamed up with Bharti Global to rescue the satellite company from bankruptcy in 2020, said it supported the decision.
11:14 AM
Boohoo follows Asos in Russia sales block
Boohoo has said it suspended sales to Russia and closed its Russian trading websites following the country’s invasion of Ukraine.
The online retailer said sales in Russia weren’t material, totalling less than 0.1pc of overall group revenues.
It comes after rival Asos said it had also halted operations in the country.
11:06 AM
Metal prices surge to fresh records
While oil and gas continue their relentless rally, the crisis in Ukraine is also driving up the price of key metals.
Zinc has shot to its highest since 2007 and aluminium hit a new record as trade turmoil spreads throughout commodities markets.
Prices for zinc, which is used to coat and protect steel, rose as much as 3.9pc on the London Metal Exchange to reach $4,013 a tonne. Nickel surged more than 7pc and copper closed in on an all-time high.
In addition to the threat to Russian exports, traders are also worried that soaring energy prices will curb production at zinc and aluminium smelters across Europe, adding to the supply strain.
10:58 AM
Volkswagen axes business in Russia
Volkswagen has joined the ever-growing list of companies halting business in Russia.
The German car giant has halted production of vehicles in the country until further notice. The move affects its factories in Kaluga near Moscow and Nizhny Novgorod.
Vehicle exports to Russia will also be halted with immediate effect, the company said.
It follows similar moves by Jaguar Land Rover, BMW and General Motors.
10:47 AM
EU sanctions will hit Russia’s oil revenue, says energy chief
Sanctions imposed on Russia by the EU will gradually deplete Moscow’s income from oil despite not targeting the country’s energy sector directly, according to the bloc’s energy chief.
The EU’s package of sanctions includes a ban on the export of specific refining technologies to Russia from Europe, making it harder and more expensive for Russia to modernise its oil refineries.
European Commissioner for Energy Kadri Simson said: “These technologies are built in Europe, they cannot be easily placed globally by other suppliers.
“So we will see that over time there will be a depletion of revenues from the refined oil that in 2019 generated 24 billion euros of revenues for Russia.”
Russia’s sales of oil and gas accounted for more than a third of the country’s total budget last year, far exceeding initial forecasts as a result of skyrocketing prices.
The EU has refrained from targeting Russia’s oil and gas industry directly. While this would deprive Moscow of a significant chunk of its revenue, it would also deal a major economic hit to Europe and push up already high gas prices.
10:35 AM
Smirnoff maker Diageo halts exports to Russia and Ukraine
Diageo, the drinks giant behind Smirnoff vodka and Guinness, has halted exports to Russia and Ukraine due to the escalating conflict.
A spokesman said: “Our priority is the safety of our people in Ukraine and the wider region.”
It comes amid reports that restaurants and bars around the world are boycotting Russian vodka in protest against Vladimir Putin’s invasion.
10:21 AM
France seizes yacht linked to Rosneft boss
It seems Alisher Usmanov isn’t the only oligarch to lose a yacht today.
French finance minister Bruno Le Maire said authorities have seized a yacht linked to Rosneft boss Igor Sechin – a close ally of Russian President Vladimir Putin – in the Mediterranean port of La Ciotat.
The country’s finance ministry said the yacht was owned by an entity of which Sechin had been identified as the main shareholder.
Separately, French authorities also seized another cargo vessel in the port of Loiret, Brittany, which was also linked to Russian interests.
Mr Le Maire wrote on Twitter: “Thanks to the French customs officers who are enforcing the European Union’s sanctions against those close to the Russian government”.”
Read more: Alisher Usmanov’s $600m superyacht ‘seized in Germany’
09:56 AM
Pound closes in on post-Brexit high against euro
Sterling is closing in on its highest level against the euro since the Brexit referendum as it proves more resilient than the single currency to shocks from the Ukraine war.
The pound edged 0.1pc higher to 82.86p this morning – its highest since the aftermath of the vote in July 2016.
It comes as the conflict fuels sharp rises in energy prices across the continent, with eurozone inflation hitting a record high of 5.8pc this month.
But the conflict in Ukraine is also posing a fresh threat to growth, complicating monetary policy decisions for the ECB.
Against the dollar, the pound dipped 0.1pc to $1.3376.
09:39 AM
Lego halts shipments to Russia
Lego has become the latest company to cut ties with Russia in the wake of the Ukraine invasion.
The iconic toymaker has halted deliveries to its 81 stores in the country following a wave of sanctions, according to local media reports.
A spokesman said: “We have suspended all shipments of products to Russia in light of the sanctions and the unpredictable operating environment.”
09:28 AM
Eurozone price inflation surges to record high
The eurozone’s economic growth regained momentum in February following a slowdown at the start of the year, but prices charged for goods and services jumped to a record high.
After slumping to an 11-month low in January amid the omicron outbreak, the latest IHS Markit composite index rebounded from 52.3 to 55.5 in February.
Overall, this was the strongest increase in combined manufacturing and services output since last September.
However, inflation continued to mount across the bloc. Input costs increased at a faster rate for the second month and selling price growth hit a survey high.
Chris Williamson, chief business economist at IHS Markit, said:
Though it remains early days to be assessing the impact of the war, growth prospects are also likely to have been hit by heightened risk aversion and new sanctions, dampening the rebound from the pandemic.
With inflation risks rising and growth prospects waning, the Ukraine conflict adds to business and household headwinds for the coming months, and exacerbates the difficult juggling act of the ECB in controlling inflation while sustaining a robust economic recovery.
09:19 AM
Alisher Usmanov’s $600m superyacht ‘seized in Germany’
German authorities have reportedly seized a $600m (£448m) yacht belonging to Russian billionaire Alisher Usmanov amid an escalating crackdown on oligarchs.
The 156-metre yacht Dilbar – the largest in the world by gross tonnage – was seized by authorities in a Hamburg shipyard.
The boat had been in the shipyards of engineering firm Blohm + Voss undergoing renovation since late October, Forbes reported, adding that the German government had frozen the asset and employees did not turn up for work on Wednesday.
Mr Usmanov was included on a list of ultra-wealthy Russians targeted for sanctions by the EU following the country’s invasion of Ukraine last week. Everton Football Club have since cut ties with the billionaire.
The luxurious vessel, which weighs 15,917 tonnes, is usually manned by a crew of 96 people and boasts the largest swimming pool ever installed on a yacht. It also has two helicopter pads, a sauna, a beauty salon and a gym and can host up to 24 people in 12 suites.
09:11 AM
London Stock Exchange lifts dividend on upbeat outlook
At the other end of the FTSE 100 is the London Stock Exchange Group, which jumped as much as 10pc following its results this morning.
The company said it’s increasing its full-year dividend by more than a quarter to 95p per share as it reported profits of £3.3bn.
LSE’s costs savings of £151m for 2021 were bigger than the £125m expected. Revenue grew in both data and capital markets, to £4.6bn and £1.3bn respectively.
The stock exchange also said integration was on track after its $27bn takeover of Refinitiv, which marked a major push into financial data.
Chief executive David Schwimmer said:
LSEG has delivered a successful first year after completion of the Refinitiv acquisition. We have produced a strong financial performance, have met or are ahead of all targets and have good momentum into 2022.
09:05 AM
ITV plunges on new streaming service launch
Shares in ITV dropped as much as 18pc – their biggest fall since the outbreak of the pandemic – after it unveiled plans to replace and upgrade its streaming service.
The broadcaster said it will launch ITVX, which will offer a free advertising-funded services and an ad-free subscription option, replacing its existing Hub.
The move forms part of a vow by chief executive Carolyn McCall to double digital revenues to at least £750m by 2026.
But she said the FTSE 100 firm will ramp up content investment to £1.35bn by 2023, while more money will go into data, technology and streaming, as well as launch costs.
08:56 AM
Rouble drops to record lows after ratings downgrades
The rouble is plumbing fresh record lows this morning after ratings agencies Fitch and Moody’s downgraded Russia’s sovereign debt to “junk” status.
The Russian currency fell more than 10pc against the dollar to 117.5 – the first time it’s traded above 110 on the Moscow Exchange. It also shed 7pc against the euro.
Russia’s economy has been plunged into chaos by a raft of sanctions rolled out by western nations in response to the country’s invasion of Ukraine.
Its central bank has imposed various restrictions designed to prop up the economy, including a 30pc commission on foreign currency purchases by individuals on currency exchanges.
Brokers said this appeared to be designed to curb demand for dollar, but it did little to halt the rouble’s slide.
08:45 AM
FTSE risers and fallers
It’s a tentative start for the FTSE 100, which is swinging between gains and losses in early trading.
The blue-chip index gained as much as 0.4pc before falling back into the red, as a commodity-driven boost was offset by disappointing corporate results.
Glencore was the biggest boost, jumping 6pc as it tracked higher metals pries. Miners Anglo American and Rio Tinto also gained ground. BP and Shell rose 2.8pc and 0.9pc respectively as oil surged past $118 a barrel.
The biggest riser was London Stock Exchange Group, which jumped almost 10pc following strong full-year results. It also said it was blocking trading in 28 companies with close ties to Russia.
But the index was dragged down by losses for some heavyweight stocks, including AstraZeneca and Unilever.
ITV dropped 15pc in its worst day since March 2020 amid higher investments and tough advertising comparatives. Melrose, Admiral Group and Rentokil all dropped after reporting results.
The domestically-focused FTSE 250 dipped 0.2pc, with Wizz Air leading losses.
08:31 AM
Natural gas hits another record high
The unstoppable rally in natural gas continues, with prices surging to another all-time high this morning.
Benchmark European prices jumped as much as 20pc to €198 per megawatt-hour. The UK equivalent gained 17pc.
While oil and gas have so far been exempted from sanctions, traders are carrying out an effective embargo on Russian energy amid a growing backlash over the war in Ukraine.
British Gas owner Centrica has axed its supply agreement with Kremlin-controlled Gazprom, and other traders are said to be following suit.
The self-sanctioning comes on top of concerns that Moscow could halt gas supplies to Europe in retaliation to sanctions. Britain is joining forces with European allies to try and reduce the continent’s exposure to Russian energy and find alternative sources.
08:21 AM
UK targets Russian aviation with insurance sanctions
Russian companies in the aviation and space industry will be blocked from accessing UK-based insurance as part of the latest wave of sanctions.
The Government said it will bring in legislation to block UK insurers and re-insurers from undertaking financial transactions connected with a Russian entity or for use in Russia.
It’s the latest effort by western nations to isolate Moscow from the global financial system in response to its invasion of Ukraine.
Through Lloyd’s and the London Market, the UK is a world leader in global insurance, meaning Russian firms will be severely limited from accessing services.
08:01 AM
FTSE 100 slips at the open
The FTSE 100 has lost ground at the open as yesterday’s commodity-driven rally ran out of steam.
The blue-chip index dipped 0.3pc to 7,405 points.
07:48 AM
Moody’s and Fitch downgrade Russia to junk
In a further sign of the economic crisis gripping Russia, both Moody’s and Fitch Ratings have downgraded the countries to junk and placed them under review for further demotion.
Russia’s long-term foreign currency issuer default rating was downgraded by Fitch to B from BBB, while Moody’s lowered its long-term issue and senior unsecured debt ratings for both local and foreign currency to B3 from Baa3.
The rating agencies said the tough sanctions on Russia would undermine its willingness to service government debt and cited a major hit to economic growth and ongoing domestic and geopolitical uncertainty.
Read more on this story: Russia’s financial system teeters on the brink of collapse
07:43 AM
Oil surges to 11-year high as commodities soar
Oil has jumped to its highest level in 11-year high and commodity prices kept soaring as the war in Ukraine fuels worries over supply.
Brent crude topped $118 a barrel – its highest since 2013. It means the benchmark has gained more than $118 in just a week since the Kremlin pushed troops into Ukraine.
West Texas Intermediate was trading above $115, its highest since 2008.
Moscow’s role as a key exporter of oil and gas is driving more chaos on energy markets, while the region’s importance for other key commodities means the panic is spreading through markets.
Wheat shot above $11 a bushel for the first time since 2008, while Zinc surged to $4,000 a tonne.
07:35 AM
LSE blocks trading in Russian stocks
Good morning.
The London Stock Exchange has rolled out a block on trading in 27 companies with close ties to Russia.
EN+, Gazprom, Lukoil, Rosneft and Sberbank are among the firms affected by the block, which comes into effect immediately.
London Stock Exchange Group said it was blocking trading in the companies “in light of market conditions, and in order to maintain orderly markets”.
On Monday the Deutsche Borse halted trading in 16 companies with links to Russia, while the New York Stock Exchange and Nasdaq have taken similar action.
5 things to start your day
1) PR guru Roland Rudd cuts ties with Russian billionaire’s business Spin doctor ditches Metalloinvest, owned by Alisher Usmanov
2) £1.5bn profit lets Dyson to hire another 2,000 engineers Appliance maker says 900 of the new jobs will be based in the UK
3) Halfords to start selling secondhand bikes Retailer to give rusting bicycles a makeover before reselling them as demand swells
4) The assets Roman Abramovich could put under the hammer Oligarch is said to be selling assets after ties to Putin makes him a potential target for sanctions
5) JCB, Burberry and Asos join widening corporate boycott of Russia Corporate giants cut ties with Russia as the country becomes a pariah
What happened overnight
Oil prices sped higher on Thursday as the war in Ukraine drove a mad dash for resources in an ominous sign for global inflation, while Asian shares eked out gains after reassuring comments from the Federal Reserve helped Wall Street bounce.
Brent crude topped $117 per barrel and is now up almost 20pc on the week, while everything from coal to natural gas and aluminium are on fire as Western nations tighten sanctions on Russia.
The rush to commodities lifted resource-rich Australian stocks 0.9pc, while Indonesia was just off a record high.
Japan’s Nikkei managed a 0.8pc gain, while MSCI’s broadest index of Asia-Pacific shares outside Japan nudged up 0.6pc.
MSCI added to Russia’s financial isolation by deciding to exile the country from its emerging markets index, while FTSE Russell said Russia would be removed from all its indices.
Fitch slashed Russia’s sovereign credit rating six notches to “junk” status, saying it was uncertain the country could service its debt, and Moody’s soon followed.
After bouncing overnight, S&P 500 stock futures were flat, while Nasdaq futures eased 0.1pc.
Coming up today
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Corporate: Admiral Group, CRH, Elementis, Entain, ITV, London Stock Exchange Group, Meggitt, Melrose Industries, Mondi, Page Group, Rentokil Initial, Schroders, Spire Healthcare Group, Synthomer, Taylor Wimpey, Tyman, Vesuvius (full-year results)
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Economics: Composite PMI (US, EU), services PMI (UK, US, EU, China), Nationwide house price index (UK), producer price index (EU), unemployment rate (EU), jobless claims (US), factory orders (US)
