Ukraine crisis: Futures waver, stocks lower as oil tops $110

Bloomberg

US futures fluctuated and stocks were lower as investors assessed the impact of Russia’s invasion of Ukraine on commodity supply and the global economy. Oil topped $110.
Contracts on US gauges were little changed, after the S&P 500 swung between losses and gains. The Stoxx Europe 600 Index was also lower, after briefly erasing declines. Ericsson led a slide in telecom shares after the US Department of Justice said it failed to make adequate disclosures about its operations in Iraq. An Asian equity index shed over 1%.
Oil jumped before an Opec+ meeting as the International Energy Agency warned that global energy security is under threat following Russia’s invasion of Ukraine. A commodity index jumped the most since 2009 to a record, with wheat futures surging to a 14-year high and corn futures in rising to the highest since 2013.
Bonds in Europe were lower, paring some of the sharp gains ahead of euro-area inflation data. Treasuries were little changed after fluctuating between gains and losses.
Russia’s invasion of Ukraine threaten disruptions that may lead to a global commodity crunch. China’s top government officials have issued orders to prioritise energy and commodities supply security.
Economic risks are also tempering expectations for how steeply the Federal Reserve will raise interest rates. Markets have priced out any risk of a half-point March liftoff. Traders in the UK and Europe have also dialed back rate-hike bets.
In his address to lawmakers, Fed Chair Jerome Powell is expected to signal the US central bank will go ahead with plans to hike rates this month.
“The Fed is going to have to continue to tamp down inflation, which I think is invariably going to get worse before it gets better,” Kathryn Rooney Vera, head of global macro research at Bulltick LLC, said on Bloomberg TV. Russia said it would press forward with its military advances in Ukraine as the war enters a more brutal stage. At the same time, moves to isolate and pressure Russia’s financial system and economy gathered steam.
President Joe Biden, in his first State of the Union address, said Russian counterpart Vladimir Putin was a “dictator” and warned the war will leave his country weaker. Biden also pledged to fight inflation at home.
Russia’s Defense Ministry said that its forces had captured Kherson, a Ukrainian port, according to a report by Interfax. The government in Kyiv hasn’t confirmed the information, but said overnight that troops were moving toward the city.
European Union ambassadors agreed to exclude seven Russian banks from the SWIFT financial-messaging system but spared the nation’s biggest lender Sberbank PJSC and a bank part-owned by Russian gas giant Gazprom PJSC.
Apple Inc halted product sales in Russia. Glencore Plc, the world’s biggest commodity trader, is reviewing business ties with Russia, while Exxon Mobil Corp said it will “discontinue” its Sakhalin-1 crude operations in the Russian Far East.
The Stoxx Europe 600 fell 0.4% in London. Futures on the S&P 500 were little changed. Futures on the Nasdaq 100 were little changed. Futures on the Dow Jones Industrial Average were little changed. The MSCI Asia Pacific Index fell 1.3%. The MSCI Emerging Markets Index fell 0.8%.
The Bloomberg Dollar Spot Index rose 0.2%. The euro fell 0.3% to $1.1094. The Japanese yen fell 0.3% to 115.23 per dollar. The offshore yuan was little changed at 6.3164 per dollar. The British pound fell 0.2% to $1.3298.
The yield on 10-year Treasuries advanced one basis point to 1.74%. Germany’s 10-year yield advanced five basis points
to -0.02%. Britain’s 10-year yield advanced six basis points to 1.19%.
Brent crude rose 5.6% to $110.85 a barrel. Spot gold fell 0.5% to $1,935.50 an ounce.