Understanding the effects of the Ukraine-Russia conflict on financial markets
Geo-political events like the Ukraine-Russia crisis can have significant repercussions for financial markets. Here, we explore what this could mean for assets with an increased exposure to the conflict’s unfolding events.
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Ukraine-Russia conflict: what you need to know
On 24 February 2022, Russia initiated a full-scale invasion of Ukraine. This move was met with criticism from political analysts worldwide and resulted in sanctions being imposed on Russia by multiple countries.
The direct economic impact varies by region and the sanctions imposed – with the Ukrainian and Russian economies suffering heavily.1 The most severe sanctions for Russia include international restrictions on the country’s central bank – cutting off access to its foreign reserves.
This has resulted in pockets of global market volatility, which may affect how you’re currently trading or investing. Before embarking on any new ventures, ensure you’ve completed your due diligence and familiarised yourself with the conditions impacting the markets.
The impact of the Ukraine-Russia conflict on commodities
Before you engage with commodities markets during the Ukraine-Russia conflict, you’d need to be aware of the crisis’s impact. Russia is the world’s second-largest crude oil producer, with approximately 40% of Europe’s gas needs and 25% of its oil needs supplied by Russia.2
The self-imposed sanctions by countries the world over is likely to result in a price increase of Russian oil, gas, industrial and agricultural commodities.
The impact of the Ukraine-Russia conflict on shares, ETFs, and indices
Stock markets, indices and ETFs are currently being affected by sanctions and general market uncertainty. With a limit on how much energy, agriculture and other sectors can produce in Ukraine – the markets will reflect this.
We’ve implemented specific market restrictions to avoid exploitation of vulnerable assets. It’s important to note that Russian banks have been ordered to prevent foreigners from buying and selling Russian securities.
- Indices
- Stocks
- ETFs
Live markets table including key indices to watch as the crisis unfolds.
Live markets table including key stocks to watch as the crisis unfolds.
Live markets table including key ETFs to watch as the crisis unfolds. EG: relevant commodity ETFs, etc.
The impact of the Ukraine-Russia conflict on forex pairs
Bouts of FX volatility are expected to occur throughout the conflict. The continuation of the crisis could see the euro weaken versus other currencies due to the reliance of the euro area on Russia’s oil and gas production.
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1 International Monetary Fund (IMF), 2022
2 Overberg Asset Management via BizNews, 2022
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