Good morning, and welcome to our rolling coverage of the world economy, the financial markets, the eurozone and business.
The mission of the International Monetary Fund is starting discussions in Ukraine for the second review of the Fund-supported programme, the global lender said today. (The meetings will be conducted virtually.)
Ukraine hopes that the talks will result in disbursement of $700m under the $5bn IMF programme, and reassure markets that have been rattled by the deepening crisis.
Western nations and Japan unveiled new sanctions yesterday in response to Vladimir Putin’s decision to order troops into separate regions of Eastern Ukraine and to formally recognise them as independent states.
The United States, European Union, UK, Australia, Canada and Japan announced sanctions targeting banks and Russian elites, while the German chancellor Olaf Scholz halted the Nord Stream 2 pipeline, a major gas project from Russia.
Britain will also stop Russia selling sovereign debt in London, with similar moves by the US and Canada.
Asian stock markets edged cautiously higher after yesterday’s losses, with the exception of Japan’s Nikkei, which fell 1.7%. Hong Kong’s Hang Seng rose 0.67%, the Shanghai Composite index gained almost 1% and the South Korean Kospi rose 0.47%. European markets are expected to follow suit when they open.
Ipek Ozkardeskaya, senior analyst at the bank Swissquote, said:
More sanctions are expected in the coming days, but the measures that have been announced so far are not as heavy as feared.
Market mood is not cheerful but the softer-than-feared sanctions somewhat help lifting the mood. The risk appetite is limited, of course, except in some key assets including oil and commodities.
European natural gas futures jumped 8% yesterday, the barrel of Brent crude flirted with the $100 mark, as the US crude spiked above $96 before easing back to the $93 level this morning. Although we had news that oil…