Russia-Ukraine war: 6 charts to know what’s happening in financial markets

LONDON: The escalation of Russia's war in Ukraine has sent commodity and energy prices soaring, boosted safe havens and hit Europe's common currency and its stock markets.

Below are six charts showing the recent dramatic market moves:

Euro in the doldrums

The euro fell below $1.10 on Friday for the first time in nearly two years, having lost more than 3% against the dollar this week in its biggest weekly drop since March 2020.

The single currency suffered even bigger losses against the Swiss franc. It is down nearly 4% for the week in its biggest drop since January 2015, when Switzerland abandoned the franc's three-year cap against the euro.

Concerns that the Russian invasion of Ukraine will deal another blow to the economy, especially as energy prices soar, explain why the currency is one of the week's biggest losers.

grains and metals

Commodity prices, from wheat to various metals, have soared to multi-year highs as Western sanctions have disrupted air and sea shipments of raw Materials produced and exported by Russia.

Russia and Ukraine are two of the world's biggest wheat exporters, which climbed to a 14-year high on Friday, having gained almost 40% since Russia invaded Ukraine on February 24.

Russia is also a supplier of metals. Aluminum hit an all-time high on Friday, while copper, where the country supplies 3.5% of global supplies, also flirted with a new all-time high.

power and gas

Brent crude prices rose another 21% on the week, closing at their highest level since 2013, with buyers and shippers increasingly avoiding Russian oil supplies, which total up to five million barrels per day (bpd).

Neither the possibility of a million bpd of Iranian crude in the event of a revived nuclear deal with the West nor the agreement of developed countries for a coordinated release of 60 million barrels made a dent.

Gas prices in Europe posted a staggering weekly gain of 120% to reach €208 per megawatt hour, an all-time high.

European banks punished

European banks had another grueling week, hit by the triple whammy of Western sanctions on Russia, lower rate hike expectations and a worsening macro environment.

The moves reverse all gains made earlier this year when it looked like the economic recovery would allow central banks to raise interest rates, benefiting banks.

An index of European bank shares fell about 16%, its worst week since March 2020, pushing year-to-date losses to 20%. Shares of lenders exposed to Russia, such as Austria's Raiffeisen and France's SocGen, fell by about a third during the week.

loving bunds

Turmoil in European markets, heightened uncertainty over the economic outlook and reduced bets on rate hikes made investors eager to buy safe-haven bonds.

In Germany, the euro zone's benchmark bond issuer, 10-year bond yields fell 30 basis points this week in their biggest one-week drop since the euro debt crisis in 2011.

At -0.08%, German Bund yields are back in negative yield territory. In other words, investors are willing to pay the German government to hold their bonds in an uncertain environment. That was not the case a week ago, when Bund yields stood at 0.22%.

ruble disconnection

Russia's ruble is down more than 30% in foreign trade, its worst week on record, and about 20% in Moscow trade. Bid-ask spreads are very wide, a sign of evaporating liquidity.

The divergence between trade onshore and abroad illustrates how disconnected Russia has become from global markets. financial markets after severe sanctions and countermeasures.