Stocks fall, dollar rises after Russia attacks Ukraine

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Global stocks and US Treasuries tumbled on Thursday (24), as the dollar, gold and oil prices soared after Russian troops launched an attack on Ukraine.

In a statement just before 5 am (11 pm in Brazil), President Vladimir Putin said he had announced a military operation to “protect the population of the Donbass”, the eastern region of the neighboring country in which he recognized pro-Russian rebel areas on Monday (21). ).

So far, there is no sign of a full-scale invasion, as Putin appears to be delivering on what he had promised: sending troops into rebel areas. But CNN TV crews heard explosions in the distance in the Ukrainian capital Kiev and the main nearby Donbass city of Kharkiv.

Everything indicates that the Russians are bombing positions in the eastern area that is within the former borders of Donetsk and Lugansk, the provinces that today have less than half of their territory dominated by Putin’s allies.

By 3:00 am ET, the Hong Kong, Sydney, Mumbai and Seoul stock exchanges were down more than 3%, and those in Tokyo, Singapore, Taipei and Wellington were down more than 2%.

Significant losses were also recorded in Shanghai, Manila, Jakarta and Bangkok. The Moscow Stock Exchange has suspended operations.

“The market was always trying to assess whether they [os russos] would stop in Donbass, and it seems pretty clear that they are moving towards Kiev, which has always been the worst case scenario, because we now have a long night ahead of us trying to figure out how bad this is going to get, and what sanctions will be put in place, because there must be a new round of rantings against Putin and the Russian government,” said Chris Weston, head of research at Pepperstone.

“This is the worst case scenario for the markets, and that’s what we’re seeing. There are no buyers here to risk, and there are a lot of sellers out there, so the market is being impacted very heavily.”

Asset markets have seen a significant increase in volatility with the escalation of the crisis.

The price of oil topped $100 for the first time in more than seven years on Thursday. A barrel of Brent hit $100.04 after the announcement, which intensified fears of a full-scale conflict in Eastern Europe. WTI oil was quoted at $95.54 a barrel.

Gold rose more than 1.7%, reaching its highest since the beginning of 2021.

Yields on US 10-year bonds were down 1.8681%. The same downward movement occurred in 2-year bonds (-1.5%).

Investors’ search for global security boosted the dollar, which rose more than 0.5% against the basket of currencies of its main trading partners. The euro, in turn, fell 0.8%.

The Russian currency, the ruble, plunged 6% against the dollar and 6.9% against the euro after a pause in its trading.

The move also contaminated cryptocurrency markets, causing bitcoin to drop below $35,000 for the first time in a month.

“Markets are now more appropriately pricing the risk of something horrible happening. That, combined with the uncertainty of a horrible environment to be in. Nobody wants to be exposed to risk in this situation,” said Rob Carnell, head of research at ING.

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