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How Russia’s Ukraine Invasion Has Hit World Markets

Here are six charts illustrating the impact of Putin’s war on energy, inflation, stocks and commodities markets across the globe

Russia Ukraine war: Ukrainian servicemen get ready to repel an attack in Ukraine's Lugansk region on February 24, 2022. Russian President Vladimir Putin launched a full-scale invasion of Ukraine on Thursday, killing dozens and forcing hundreds to flee for their lives. AFP Photo
Ukrainian servicemen get ready to repel an attack in Ukraine's Lugansk region on February 24, 2022. Russian President Vladimir Putin launched a full-scale invasion of Ukraine on Thursday, killing dozens and forcing hundreds to flee for their lives. AFP Photo


Russia launched a full-scale invasion of Ukraine this week, sparking a slew of sanctions and turmoil in global financial markets.

Below are six charts showing the week’s dramatic moves in financial markets:



Fears of a potential supply disruption on oil markets from the war in Ukraine saw crude prices surge above $100 a barrel for the first time since 2014, with Brent touching $105. UK and Dutch gas prices rose about 40%-50% on Thursday. Both crude and gas prices came down on Friday, but markets remain jittery.

While a raft of harsh sanctions imposed by western capitals has not specifically targeted Russia’s oil and gas flows, top buyers of Russian oil were struggling to secure guarantees at Western banks or find ships to take crude from the country.

Russia is the world’s second-largest crude producer and provides around 35% of Europe’s and 50% of Germany’s natural gas supply.

Brent crude and European gas prices soar



Soaring energy prices fuelled a dash for inflation-linked bonds – securities whose payouts rise in line with inflation.

That has sent real yields – borrowing costs after adjusting for inflation – sharply lower, while so-called break-evens, indicating where markets see future inflation, rose sharply.

Essentially, that implies belief that central banks may have to go slower than earlier forecast with interest rate rises to battle inflation as economic growth also takes a hit.

Yields on rate-sensitive Treasury Inflation Protected Securities (TIPS) slipped while break-evens rose towards 3% this past week. In Germany, vulnerable to surging European gas prices, two-year real yields slumped around 30 bps and break-evens rose as high as 3.7% TIPS funds received net inflows for the first time in five weeks, Bank of America data shows.

Inflation expectations on the rise



Thursday’s market rout wiped nearly $1 trillion off the value of the global stock market and accelerated a drop in the major indexes that has come this year as investors have started to get jittery about major central bank rate hikes.

The tech-heavy US Nasdaq flirted with “bear” market territory, as a 20% fall from the last peak is known, but US markets ended up closing higher despite all the damage elsewhere and were making more ground on Friday.

Europe’s 3.3% drop for the STOXX 600 took its recent reverse past 10%, but it then bounced just as much on Friday. 

MSCI’s 24-country emerging markets index meanwhile did earn its “bear” market tag as its 4.3% drop on Thursday left it down just over 20% from a record high almost exactly a year ago.

Major indices tumble



Predictably, Russia’s stock market was hit the hardest on Thursday. Moscow’s MOEX exchange slumped a record 33% having plunged more than 1,000 points at one stage as traders braced for stiff sanctions. MSCI’s Russia index crashed 38%. Analysts estimate that it was one of the top three stock market crashes of all time.

Cost of the conflict



Ukraine was hit just as hard. Its currency and government bonds crashed violently, with investors wondering whether the country would be able to avoid another sovereign default. 

Ukraine GDP-linked bonds fall



Wheat prices hit their highest since mid-2008 as markets tried to gauge the consequences on grain and oilseed supplies from the conflict between Russia and Ukraine – two of the world’s biggest exporters.

Interruption to the supply out of the Black Sea region will put pressure on prices and further drive up food inflation at a time when affordability is a major concern across the globe following the economic damage caused by the Covid-19 pandemic.

Ukraine’s military on Thursday suspended commercial shipping at its ports after Russian forces invaded the country. Russia earlier ordered the Azov Sea closed to the movement of commercial vessels until further notice, but kept Russian ports in the Black Sea open for navigation.

Soaring food prices


  • Reuters with additional editing by Sean O’Meara


Read more:

Ukraine Invasion Resets Priorities for Asian Central Banks

China’s Didi Performs U-Turn On Russia Exit Decision

Russia’s Economy Seen Crumbling Over Time Under Sanctions


Sean O'Meara

Sean O'Meara is an Editor at Asia Financial. He has been a newspaper man for more than 30 years, working at local, regional and national titles in the UK as a writer, sub-editor, page designer and print editor. A football, cricket and rugby fan, he has a particular interest in sports finance.


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