Aurelia Butler

Investing.com — Fresh Western sanctions trigger financial panic in Russia and sharp falls in equities worldwide. The dollar and gold rise. Vladimir Putin puts his nuclear forces on high alert after “unfriendly” moves, while Europe awakes from a 30-year slumber on defense policy. In the U.S., New York City lifts its mask mandate and Lucid Motors is set to report earnings. Here’s what you need to know in financial markets on Monday, 28th February.1. Russian assets tumble after fresh sanctionsThe Russian ruble tumbled after new western sanctions effectively froze over half the foreign reserves of its central bank and shut selected Russian banks out of the global financial messaging network SWIFT. That move will stop almost all payments into and out of Russia, except those directly linked to payment for Russian energy exports.News of the sanctions triggered mass runs on deposits at Russia’s banks, Around 30% of Russian retail deposits are held in foreign currency.The Central Bank, which doubled its benchmark rate to 20% to defend the ruble, said that Russia’s stock exchanges would remain closed all day, but depositary receipts of Russian companies listed in Europe, fell sharply, as did Russia-themed ETFs. Governor Elvira Nabiullina will hold a press briefing at 8 AM ET (1300 GMT).2. Putin puts nuke forces on high alert as EU steps upIn addition to the financial measures announced, the weekend also saw major shifts in European foreign policy, as the continent was jolted into a new assessment of political realities.Germany announced its biggest increase in defense spending since the end of the Cold War and vowed to spend above the amount recommended for NATO members in the future. The European Union for the first time ever said it would ship lethal weaponry to another country and closed its airspace to Russian commercial aircraft.On the battlefield, Ukrainian forces continued to frustrate Russian attempts to seize major cities across the country. Unverified reports and social media footage suggested that Russia had responded by launching missile barrages against cities such as Kharkiv to break their resistance.On Sunday, Russian President Vladimir Putin had placed his country’s strategic nuclear forces on high alert, describing the move as a response to ‘hostile’ actions by the West against Russia.Despite this, Ukrainian and Russian diplomats are due to meet on the Ukraine-Belarus border later.3. U.S. stocks set to open sharply lowerU.S. stock markets are set to follow European markets lower when they open later, in a response to the political and military developments.By 6:15 AM ET, Dow Jones futures were down 443 points, or 1.3%, while S&P 500 futures were down 1.5% and Nasdaq 100 futures were down 1.4%.HP (NYSE:HPQ), Lucid Motors (NASDAQ:LCID) and Workday (NASDAQ:WDAY) are among companies reporting earnings later.The situation was also reflected in a rush for haven assets. The dollar index rose strongly, while the yield on the 10-year U.S. Treasury fell six basis points to 1.92%. Gold futures rose another 1.0% to trade back above $1,900 an ounce.4. Oil and gas prices surge on new fearsCrude oil prices rose sharply, as did European natural gas futures, amid fears that the new sanctions could disrupt energy flows out of Russia, even though they were tailored to avoid doing so.By 6:15 AM ET, U.S. crude futures were up 4.3% at $95.56 a barrel, while Brent crude was up 4.4% at $96.29 a barrel. U.S. Natural gas futures rose 1.5% to $4.538 per thousand BTUs, in anticipation of heightened demand from Europe to cover shortfalls in supplies from Russia.Over the weekend, oil giants BP (NYSE:BP) and Equinor (OL:EQNR) said they will start exiting their Russian holdings. BP envisages a hit of up to $25 billion from a fire sale of its 19.75% stake in Rosneft (OTC:OJSCY), most of it, albeit in the form of non-cash charges.5. NYC to lift mask mandateIn brighter news, New York City said it will lift its mandate on people to wear masks in restaurants and entertainment venues as of March 7, another landmark in the country’s emergence from the latest wave of the pandemic.The nationwide 7-day case rate has now fallen to its lowest since last July.It’s a different story in China, however, where Hong Kong continues to record unprecedented levels of both new infections and deaths. Figures for the Chinese mainland, which are harder to verify, also continue to show rising case incidences. More

Russia’s central bank more than doubled interest rates on Monday in an attempt to steady the country’s financial markets, after unprecedented western sanctions sent the rouble tumbling as much as 29 per cent.The central bank boosted its main interest rate to 20 per cent from 9.5 per cent in an emergency decision, saying that “external conditions for the Russian economy have drastically changed”. The rouble dropped to almost 118 against the US dollar in offshore trading on Monday, according to Bloomberg data, after Russian president Vladimir Putin put his nuclear forces on high alert and the US, Europe and UK unleashed sanctions aimed at cutting the country off from the global financial system. The exchange rate later recovered to around 102 in what market participants described as deeply strained trading conditions that make it difficult for foreigners to sell.Russia’s biggest foreign bond, a $7bn bond maturing in 2047, halved in price to 35 cents on the dollar, according to Tradeweb data. Investors said the market was extremely hard to trade. “If you see a quote on the screen it might be live or it might not,” said one. “There’s nothing certain in this environment. It’s not about fundamentals any more, it’s about compliance issues.”Trading in shares and derivatives on the Moscow Exchange was suspended, Russia’s central bank confirmed on Monday. However Russia-focused shares traded on other markets around the world dropped heavily. Global depositary receipts of Russian companies traded in London, such as Sberbank, Lukoil and VTB, remained open. GDRs are a type of bank certificate that securitises the ownership of shares. Sberbank, which the European Central Bank warned was “failing”, plummeted as much as 75 per cent and TCS Group, which owns Tinkoff, dropped as much as 78 per cent. Gazprom halved in value. The LSE said it would suspend the shares of VTB, the Russian bank, if it remained on the US list of sanctioned companies from May 25.In a further sign of how Moscow is being pushed further to the fringes of world markets, Norway said on Sunday that its $1.3tn oil fund, the world’s biggest sovereign wealth fund, would freeze its investments in Russian assets and begin divesting from the country. BP, the UK energy group, also said it would divest the 20 per cent stake in Russian state-owned oil company Rosneft it had held since 2013. The rouble had already been hit hard in the previous week, sliding to record lows following the invasion and the imposition of sanctions by the US and Europe.The US and its allies ratcheted up those punitive measures on Saturday, taking aim at Russia’s central bank to prevent it from using international reserves. Western allies also agreed to cut some of the country’s lenders out of the Swift messaging system, a crucial piece of infrastructure for global payments.Russians have been forming long queues to withdraw money out of cash machines, with the central bank lacking an obvious mechanism to stabilise its economy and currency. The central bank said on Monday its rate increase was aimed at supporting “financial and price stability and protect the savings of citizens from depreciation”. “Put simply, Russia’s ability to transact with any financial institution at a global level will be severely impaired, because most international banks across any jurisdiction use Swift,” George Saravelos, an analyst at Deutsche Bank, wrote in a note to clients.

Saravelos added that he expected financial markets to reflect intensifying risks to energy supplies, denting investors’ willingness to buy risky assets and potentially also dragging down the euro.“Money markets may experience some deterioration in funding conditions this week on the back of the uncertain impact of an asset freeze on global liquidity. It would be expected that the European Central Bank, Fed and other central banks step in to provide a powerful backstop if needed and we would not rule out inter-meeting announcements,” he said, adding that the rouble and other European emerging market currencies were likely to come under pressure.On Friday, rating agency S&P Global cut Russia’s debt rating to “junk” status, underlining the risk that the military assault on Ukraine could prove even more deeply damaging to the country’s financial markets.“The Russia bond market is not functioning at all, other than EU and US banks working on unwinding any outstanding trades with Russian banks,” said Kaan Nazli, a portfolio manager at Neuberger Berman. “The local bond market has had no liquidity since the beginning of the invasion and this is now made worse by the central bank’s decision to stop local banks from helping foreigners reduce bond holdings. There was some buying of the Russian Eurobonds by the local banks on Friday. Now with the Swift and central bank bans there isn’t activity.”Additional reporting by Philip Stafford and Harriet Clarfelt More

LONDON (Reuters) -The Church of England has joined a growing list of investors looking to exit Russian assets after Ukraine was attacked, although doing so is likely to become harder.The Church Commissioners and the Church of England Pensions Board said they had instructed fund managers on Feb. 24 to sell their direct holdings in Russian companies in response to Russia’s attack on Ukraine.The church said it would also make no further investments in Russian companies.”Prior to the instruction, holdings across portfolios in Russian companies represented approximately 0.16% of total investments. No investments were held in Russian sovereign debt,” a spokesperson said on Monday.The move follows news over the weekend that Norway’s $1.3 trillion sovereign wealth fund, the world’s largest, planned to do the same, and as the New York City Comptroller said he weas reviewing assets for possible divestment.However, investor looking to sell will likely find it harder to do so. Russia’s central bank ordered market participants to reject attempts by foreign clients to sell Russian securities.Meanwhile, Euroclear said on Monday it has closed its link to rival settlement house Clearstream Banking for settling trades in Russian securities in response to European Union financial sanctions. More

Russia’s central bank has more than doubled interest rates to support a plunging rouble as the economic impact of President Vladimir Putin’s invasion of Ukraine hit the Russian economy.In an emergency move, the Russian central bank increased interest rates to 20 per cent from 9.5 per cent as the currency lost nearly a third of its value against the dollar following the announcement of unprecedented sanctions on Russia’s banking system.The central bank also banned foreigners from selling local securities and pushed back trading on the Moscow stock exchange as fears of financial chaos in Russia spread. The Kremlin conceded that the economic reality in Russia had “significantly changed” following the sharp fall in the rouble’s value and the rise in interest rates. Putin has called for an emergency meeting with his economic advisers later today in response to Russia’s growing financial crisis.Over the weekend queues formed at Russia’s empty cash machines as savers feared a collapse of the rouble and worried they would be unable to access the international payments system.In other developments:The Ukrainian military commander leading the defence of Kyiv said his troops had successfully defended the capital from a Russian attack overnight.Luxembourg has become the latest EU country to offer weapons to Ukraine. Over the weekend Germany dropped its longstanding policy not to deliver weapons to conflict zones.Putin put Russia’s nuclear forces on high alert in response to what he called “illegitimate western sanctions”. Ukraine’s President Volodymyr Zelensky agreed to send a delegation to peace talks with Russia “without preconditions”.BP agreed to divest its 20 per cent stake in Russian state-owned oil company Rosneft and Norway’s $1.3tn oil fund said it would dump its Russian investments.The EU announced plans to ban Russian airlines from almost all European airspace, leaving aircraft leasing companies scrambling to recover hundreds of planes.In the western Ukrainian city of Lviv refugees try to escape the war amid an escalating humanitarian crisis.Follow the latest developments on our live blog and track the conflict in maps. We also have an explainer detailing how western sanctions could hobble the Russian economy and our editorial board argues that Putin’s war looks ever more like a miscalculation that could make him more dangerous. Thanks for reading FirstFT Americas. To keep up to date with all that’s happening in Ukraine, sign up here to receive my colleague Valentina Pop’s essential newsletter, Europe Express — Gordon Five more stories in the news1. World’s largest SWF to vote against Apple’s pay policies Norway’s oil fund will vote against the iPhone maker’s pay policies, as well as shareholder proposals on transparency, forced labour, a civil rights audit and sustainability disclosures, according to its voting intention.2. Buffett bemoans few good deals Warren Buffett lamented the lack of attractive investments available to his sprawling $713bn Berkshire Hathaway conglomerate over the weekend. In his annual letter to investors, Buffett wrote that low interest rates had inflated valuations across financial markets and that he and partner Charlie Munger had found “little that excites us”.3. Australian cities under water after ‘rain bomb’ strikes Devastating floods have submerged cities and towns in Queensland and New South Wales, triggering thousands of insurance claims and stoking criticism of the Australian government’s stance on climate change.4. Fried Frank poaches 35 legal staff from rival Cadwalader Fried Frank, the US law firm, has poached a team of financial services lawyers from its rival Cadwalader, Wickersham & Taft, as fierce competition for lawyers rages across the industry.5. Austrian group faces fraud and embezzlement allegations Top executives at packaging company Schur Flexibles are alleged to have embezzled millions of euros and committed accounting fraud, stunning investors that lent the group nearly €500mn less than six months ago.Coronavirus digestCadavers are piling up at Hong Kong’s hospitals and public mortuaries as the number of Covid-19 cases soars in the territory.Three in 10 respondents agreed that surveillance at work had increased during Covid, according to a survey from the UK’s largest federation of trade unions.Russia’s invasion of Ukraine has shattered hopes of a strong global economic recovery from coronavirus — at least in the short term.The day aheadUN summits The UN General Assembly, which comprises all members, will hold an emergency session over Russia’s invasion of Ukraine. The UN Human Rights Council kicks off its 49th session in Geneva, with French foreign minister Jean-Yves Le Drian due to speak on security concerns, and Kenya hosts the fifth session of the UN Environment Assembly.Read on: Chemical and plastics manufacturers are lobbying to weaken a UN plastics treaty proposal to cover the waste problem rather than production.Emmanuel Macron to announce re-election campaign The French president is expected to announce his candidacy for re-election. The FT is tracking national opinion polls in the run-up to the first round of voting in April.What else we’re reading Is fertility a topic for the workplace? When Raina Brands posted updates to her CV on Twitter last year, the focus for the UCL associate professor was not professional but personal: “recurrent pregnancy loss” (2019-20) and the birth of her son (2021). “I believe it is time to update #academic CVs to be inclusive of women’s whole lives,” she wrote.

All the champions and policies in the world will fail if the culture is hostile, a line manager is unsympathetic or personal information is used against employees © Dom Mackenzie

Donald Trump’s accounts may hold him to account The former US president must be feeling more than usually unassailable, after seeing off two impeachments and a special counsel investigation. But despite his love of bombast, Trump’s legal woes are far from over, writes our editorial board.The race to a post-dollar world Russia’s invasion of Ukraine is a critical turning point that will have lasting economic consequences. Among them will be a quickening shift to a bipolar global financial system, one based on the dollar and the other on the renminbi, writes Rana Foroohar. How a Brazilian crime syndicate built a global drug empire Founded as a prison brotherhood 30 years ago in São Paulo, the Primeiro Comando da Capital, or First Capital Command, has evolved into a multinational mafia, with a revenue stream that generates upwards of $500mn every year, according to state prosecutors. Here’s how they did it.Cancer, Covid and me Miranda Green’s cancer diagnosis coincided with the start of the Covid emergency, leading to the postponement of her treatment. “So began the most surreal and extreme period of my life,” she writes.FashionAs Covid restrictions wound down in the UK, designers returned to the catwalk with novel ideas for shows. More than a few of the 37 brands that returned to in-person shows in London this season displayed an urge to do something more considered and memorable.

Richard Quinn was one of many designers setting up memorable shows during London Fashion Week © Mike Marsland/WireImage More

“The guiding principle will be reciprocity, and our own interests will be at the forefront of that,” he told reporters on a conference call. More

The UN has put civilian casualties in Ukraine since Russia invaded at more than 100, including children, while 400,000 have fled the fighting as the commissioner for human rights said the world was at a “tipping point”.“The military attack on Ukraine is putting at risk countless lives,” said Michelle Bachelet, high commissioner for human rights, at the 49th session of the council in Geneva.The UN’s Office for the High Commissioner for Human Rights has recorded 102 killed in the conflict from Thursday morning to Sunday night, including seven children, with 304 injured.“Most of these civilians were killed by explosive weapons with a wide impact area, including shelling from heavy artillery and multi-launch rocket systems, and air strikes,” Bachelet said on Monday. “The real figures are, I fear, considerably higher.“Meanwhile, millions of civilians, including vulnerable and older people, are forced to huddle in different forms of bomb shelters, such as underground stations, to escape explosions,” she said. As many as 422,000 people have fled Ukraine since Thursday morning, with many more internally displaced, the UN High Commissioner for Refugees reported.Monday’s council session, Bachelet said, takes place at a time that calls for “strong and visionary leadership”.“Throughout history, there have been moments of profound gravity, that cut the course of events between a ‘before’ — and a very different, more harmful, ‘after’,” she said. “We are at such a tipping point.” More