Investment markets shaken by the Russian invasion – Business & Finance


Volatility levels hit a two-year high as markets digested the minute-by-minute flow of news about Russia’s invasion of Ukraine, writes Ian Slattery.

Pictured: Ian Slattery, Zurich Investments

On Thursday, the NASDAQ saw an intraday swing of nearly 7% — the largest since the COVID pandemic began nearly two years ago. At its low last week, the S&P 500 was down nearly 15% from its all-time high in early January, firmly in correction territory (defined as a decline of between 10% and 20%). However, the markets rallied strongly on Friday and ended the week with a positive return.

The economic consequences of the war in Ukraine and the resulting sanctions will take some time to fully manifest. The direct impact on the US market (the largest in the world) should be somewhat mitigated in the medium term. However, Russia has a much stronger influence on commodity markets.

Oil jumped to over $105 a barrel, its highest level since 2014.

As noted earlier, Europe receives more than a third of its gas and more than a quarter of its oil from Russia. Energy supply was expected to be reduced and the impact on prices was obvious. Oil jumped to over $105 a barrel, its highest level since 2014, as gas also rose. The price of energy and agricultural raw materials is probably where Europeans will see the most impact of the invasion, from an economic point of view. This could complicate the situation for central bankers who will have to balance the resulting potential for higher inflation with the need to provide economic support in times of geopolitical tensions.

While the market was by no means the center of attention last week, there was a flurry of economic releases. US PCE inflation data, the Federal Reserve’s preferred gauge, came in at 5.2% for the year to the end of January. US PMI flash data was positive and showed an increase in economic activity over the past month. On a more cautious note, new home sales fell 4.5% in the United States.

Finally, the Eurozone composite PMI rose to 55.8 from 52.3 in January.


Global equities rose 1.0% in euros and 0.2% in local terms last week. Year-to-date, global markets are down -6.6% in euros and -7.6% in local terms. The US market, the largest in the world, grew by 1.7% in euros and 0.9% in local terms.

Fixed Income and Foreign Exchange

The US 10-year rate ended at 1.91% last week. The German equivalent ended at 0.18%. The yield on the Irish 10-year bond closed at 0.80% to remain in positive territory. The euro/US dollar exchange rate finished at 1.12, while the euro/GBP finished at 0.84.


Oil ended the week at $96 a barrel and is up 29.4% year-to-date in euros. Gold ended the week at $1,897 per troy ounce and is up 5.4% year-to-date in euros. Copper ended the week at $9,918 per ton.

The week ahead

tuesday 1st March

Chinese PMI data will be printed.

thursday 3rd March

The latest unemployment figures for the euro zone are published.

friday 4and March

US non-farm payrolls for February are released.


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