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Crude oil rose as the ruble fell nearly 30 percent to a new record low on Monday as Western nations imposed tougher new sanctions on Russia over its occupation of Ukraine.
These sanctions include blocking some banks from the global SWIFT payment system.
Demand for safe investment boosted bonds along with the dollar and yen as the euro fell as Russian President Vladimir Putin put the nuclear armed forces on high alert Sunday, the fourth day of the biggest attack on a European country since World War Two.
Rising tensions added to fears that oil supplies from the world’s second-largest producer could be cut off, pushing the price of Brent crude futures by $ 4.21, or 4.3 percent, to 102. $ 14. West Texas Intermediate (WTI) crude futures rose $ 4.58, or 5.0%, to $ 96.17 a barrel.
“I’m telling customers that all we know for sure is that energy prices will be higher,” said John Milroy, financial adviser to Ord Minnett in Sydney.
“It’s an old cliché, but it is true that uncertainty drives movement in both directions.”
Shares of Asia-Pacific fell in the morning session mainly, in line with declines for future shares in the US and Europe.
Japan’s Nikkei 225 (.N225) fell 0.25% while Chinese stocks (.CSI300) fell 0.36%. The Australian Standard (.AXJO), however, rose 0.64%, driven by energy stocks.
MSCI Regional Stock Index (.MIAP00000PUS) lost 0.58%.
Futures contracts in the US signaled a decline of 2.35%, while pan-European EURO STOXX 50 contracts fell 3.90%. FTSE futures fell 1.21%.
“We had a lot of very negative information over the weekend,” said Kyle Rodda, a market analyst at IG Australia. “We are talking about the dangers of financial stability and we are reflecting on that threat of nuclear war.”
“Instability has increased,” he said. “Price performance is highly volatile.”
The 10-year Yield of US Treasury securities fell by about 9 basis points to 1.89%, and Australian equivalent yields retreated by about 6 basis points to 2.177%.
The euro fell 1.1% to $ 1.11465 and 1.1% to 128,785 yen, while risk-sensitive Australian and New Zealand dollars fell 0.78% and 0.88%, respectively.
The ruble fell sharply by up to 29.67%, reaching a record low of 119.5 per dollar.
Gold rose more than 1% to around $ 1,909 as a result of demand for safer assets.
“This instability will continue for a while, until the situation calms down,” said Shane Oliver, chief economist at AMP Capital.
“Markets will fluctuate, depending on the title,” he said./Reuters, Monitor
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