Oil prices soared to a seven-year high, and safe-haven assets rallied with US stock futures slumping in trading today. The main catalyst that haunts global markets is when the eastern region of Europe is on the verge of war after Russian President Vladimir Putin blessed the two eastern regions of Ukraine that break away.
Tuesday (22/2) at 07.15 WIB, the price of Brent crude oil futures for delivery in April 2022 jumped 4% to US$ 97.35 per barrel, the highest since September 2014.
Meanwhile, S&P 500 futures ESc1 were down 2% and Nasdaq futures NQc1 were down 2.7%.
European stock markets also corrected with .STOXX down 1.3% to its lowest level in four months. Meanwhile, the Russian ruble was corrected and the Russian MOEX stock index .IMOEX fell 10.5%.
United States markets were closed for a holiday on Monday (21/1). Meanwhile, the Australian stock market ASX 200 index fell 1.3% in early trading today.
The turmoil in global markets came after Putin recognized the two breakaway regions of eastern Ukraine as independent and ordered the Russian army to launch what Moscow calls a peacekeeping operation into the region. This increases the risk in a crisis that could trigger a major war in the region.
"In these circumstances, the risk metric is the driving force," said NAB Head of Foreign Exchange Strategy, Ray Attrill.
In currency trading, safe-haven assets such as the yen rose 0.2% in Asian markets to a nearly three-week high of 114.50 per US dollar.
The euro fell 0.1% to a one-week low of $1.1296 and the Russian ruble touched a one-month low of 80.289 per dollar.
It was not immediately clear whether Russia's military action was a prelude to the invasion of Ukraine that the United States and its allies had been warning about for weeks. There is no word on the size of the force Putin is sending, when they will cross the border and what their mission will be.
In response to Russia's remarks, US President Joe Biden has signed an executive order banning trade and investment between US citizens and citizens from the two breakaway regions of eastern Ukraine. This has been confirmed by the White House.
Britain has promised to impose sanctions on Russia, which it warns could attack Ukraine in the near future.
The jitters in global markets pushed US Treasury yields lower, with the yield on the benchmark 10-year US Treasury down 5.5 basis points (bp) to 1.8715%.
Bets on a Federal Reserve rate hike are also easing and odds of a 50 bp hike next month dip below 1-in-5.
