NEW YORK, Feb 22 (Reuters) – Crude oil futures on Tuesday reached their highest levels since 2014 on supply concerns and stocks sold off in a volatile session as investors eyed international responses after Russia sent troops into parts of Ukraine.

Markets were jittery a day after Russia’s move but the safe-haven U.S. dollar was slightly lower against major currencies while gold, another safety bet, was also in the red.

U.S. President Joe Biden announced the first sanctions against Russia for what he called Moscow’s beginning of an invasion of Ukraine, and he promised steeper punishments ahead if Russia continued its aggression. While the S&P 500 confirmed it is in a correction by closing more than 10% under its record high, it still finished above its session low, reached before Biden spoke.

“When Biden came out and set sanctions they weren’t maybe as severe as people were fearing,” said Robert Pavlik, senior portfolio manager at Dakota Wealth in Fairfield, Connecticut. And while investors were jittery, Pavlik said that “people are trying to sit with what they own if they’ve adjusted their portfolio ahead of all this. For those that haven’t, it’s a little late in the game.”

The European Union also agreed on new sanctions against Russia on Tuesday while German Chancellor Olaf Scholz halted the new Nord Stream 2 gas pipeline from Russia and Britain took action against Russian banks. read more

“The world is still hoping this is somewhat limited and doesn’t really spread across Europe and Ukraine,” said Peter Tuz, president of Chase Investment Counsel in Charlottesville, Virginia, noting that riskier assets were selling off. “Nobody’s rushing to buy.”

Brent crude futures settled up 1.5% at $96.84 per barrel after earlier topping $99 for the highest level since September 2014, reflecting fears that Russia’s energy exports could be disrupted by any conflict. U.S. West Texas Intermediate (WTI) crude settled up 1.4% at $92.35 per barrel after earlier hitting $96, its highest level since August 2014.

The German share price index DAX graph is pictured at the stock exchange in Frankfurt, Germany, February 16, 2022. REUTERS/Staff
The German share price index DAX graph is pictured at the stock exchange in Frankfurt, Germany, February 16, 2022. REUTERS/Staff
The Dow Jones Industrial Average (.DJI) closed down 482.57 points, or 1.42%, at 33,596.61, while the S&P 500 (.SPX) lost 44.11 points, or 1.01%, falling to 4,304.76 and the Nasdaq Composite (.IXIC) dropped 166.55 points, or 1.23%, to 13,381.52.

The MSCI world equity index (.MIWD00000PUS), which tracks shares in 50 countries, shed 0.9% after earlier falling 1.5%, with the index at levels not seen since Jan. 28. Spot gold fell 0.4% at $1,898.77 after earlier climbing to its highest level since June. read more

Yields on U.S. Treasuries edged higher after Biden announced new sanctions on Russia in retaliation for Moscow’s dispatch of troops into what it recognized as two breakaway regions of Ukraine, but the bond market reaction was muted overall. Benchmark 10-year notes last fell 2/32 in price to yield 1.9372%, up from 1.93% in the previous session. Yields move in the opposite direction to bond prices.

The dollar index fell 0.047%, with the euro up 0.14% to $1.1326. The Japanese yen weakened 0.29% versus the greenback at 115.06 per dollar, while Sterling was last trading at $1.3581, down 0.13% on the day. The Russian rouble slid to 80.9275 against the U.S. dollar in earlier trading, touching its lowest level against the greenback since November 2020, before reversing course. The dollar was last down 1.7% against the rouble.

Russian dollar bonds extended their losses a little after the U.S. sanctions were announced, with longer-dated issues slipping to record lows trading in the mid-90s, data showed. The premium demanded by investors to hold Russian debt over safe-have U.S. Treasuries blew out to 329 basis points, the widest since the COVID-19 pandemic market rout in spring 2020. (.JPMEGDRUSR)

Reporting by Sinéad Carew in New York, Devik Jain in Bengaluru, additional reporting by Karin Strohecker, Tom Wilson, Marc Jones in London, Alun John and Xie Yu in Hong Kong, Tom Westbrook in Singapore, Andrew Galbraith in Shanghai Editing by David Goodman, Will Dunham, Mark Potter and Mark Heinrich

HONG KONG, Feb 15 (Reuters) – Tensions in eastern Europe weighed on the euro on Tuesday and pushed demand for the dollar and the safe-haven yen, while the greenback was also helped by debate about more aggressive U.S. interest rate hikes.

The euro was at $1.1308 in early Asia having touched $1.1278 the day before, its lowest in a week-and-a-half. The yen was at 115.33 per dollar, after briefly hitting 114.99 on Monday, its strongest in a week. Moves were slightly more cautious elsewhere and the overall result was that the dollar index, which tracks the greenback against six peers was at 96.244, just off Monday’s two-week high.

Investors were spooked somewhat overnight by Ukrainian President Volodymyr Zelenskiy calling on citizens to fly the country’s flags from buildings and sing the national anthem in unison on Feb. 16, a date that some Western media have cited as a possible start of a Russian invasion.

Ukrainian officials stressed, however, that Zelenskiy was not predicting an attack on that date, but responding with scepticism to foreign media reports. Away from geopolitics, U.S. Federal Reserve officials continuing to spar over how aggressively to begin upcoming interest rate increases at their March meeting.

Hawkish Fed official James Bullard, who last week broke ranks to call for a large 50 basis point increase, reiterated calls for a faster pace of interest rate hikes on Monday, though other officials were more cautious in their public remarks.

Tensions in Ukraine and the more aggressive outlooks for the Fed funds rate are both supportive for the dollar in the near term, said Kim Mundy, senior currency strategist at Commonwealth Bank of Australia.

“Your best bet for seeing which is having a greater impact is to look at USD/JPY and we have seen that trading a little bit weaker in the last day or two, which suggests markets are very conscious of what’s happening on the Ukraine border,” Mundy said. “We just have to keep watching the headlines and see what happens.”

The safe-haven yen typically benefits when investors are nervous, while the contrast between U.S. interest rate hikes and a dovish Bank of Japan ought to push the yen lower.

The BOJ, last week, said it would buy an unlimited amount of 10-year government bonds at 0.25%, underscoring its resolve to prevent rising global yields from pushing up domestic borrowing costs too much.
Investors did not test this 0.25% line on Monday. Russia’s rouble remained volatile but strengthened overall on Monday, and gained 1.1%, though it was slightly weaker again in early Asia.

Reporting by Alun John; Editing by Sam Holmes

SINGAPORE, Feb 8 (Reuters) – Asian equities consolidated recent gains as investors’ sentiment improved amid strong results by U.S. companies, helping stocks recover from the worst start to the year since 2016, while a resurgent euro paused ahead of U.S inflation data.

Markets are still alert for rate increases in both the euro zone and the United States after the European Central Bank last week was considered to have adopted a more hawkish tone. Euro zone yields rose sharply on Monday with Italian bond prices underperforming their peers. The United States has reported stronger-than-expected jobs and earnings data. read more

MSCI’s broadest index of Asia-Pacific shares outside Japan (.MIAPJ0000PUS) edged up 0.05% to 614.6 after rising to 617.7, the highest since January 25. The benchmark is now up about 3% from a more than one-year low of 595.99 struck on Jan 27.

“Much of investors’ concern is focused on the five Fed increases that markets are pricing in for 2022, and if they won’t be sufficient to contain inflation,” Seema Shah, chief strategist at Principal Global Investors, said in a note. “Yet, the Fed’s urgency to tighten should soon ease as the most acute economic price pressures start fading. Furthermore, while U.S. growth has likely peaked, a recession isn’t in the cards,” she said.

Japan’s Nikkei (.N225) rose 0.4%, Korean stocks (.KSII) went up 0.7% and Taiwan (.TWII) gained 0.6%. Hong Kong stocks figured among the losers, with the Hang Seng index (.HSI) falling 0.7%.

S&P 500 futures were steady and Nasdaq futures edged up 0.06%. The MSCI World index (.MIWD00000PUS) fell 6.2% in January – the worst start to the year since 2016. U.S. consumer price figures for January are due on Thursday and could show core inflation accelerating to the fastest pace since 1982 at 5.9%.

Major Wall Street stock indexes were mixed throughout the session on Monday before ending down as markets digested mixed quarterly results from megacaps Amazon.com Inc and Facebook owner Meta Platforms (FB.O).

The Dow Jones Industrial Average (.DJI) ended flat, while the S&P 500 (.SPX) lost 0.37% and the Nasdaq Composite (.IXIC) dropped 0.6%. Of the 278 companies in the S&P 500 that have posted earnings as of Friday, 78.4% reported above analysts’ expectations, according to Refinitiv data.

“Corporate profits are the strongest in decades, consumers are backed by excess savings, and gradual supply chain normalization should provide a boost to inventories and production,” Shah of Principal Global Investors said.

The U.S. January payrolls report on Friday showed annual growth in average hourly earnings climbed to 5.7%, from 4.9%, while payrolls for prior months were revised up by 709,000 to radically change the trend in hiring. In foreign exchange markets, the euro inched down 0.1% , having shot up 2.7% last week in its best performance since early 2020 on the tightening expectations. read more

The euro has held gains but has been unable to beat resistance around $1.1483 even as European bond yields have leapt and last bought $1.1441. The dollar crept 0.1% higher on the yen to 115.27 and the U.S. dollar index stayed at 95.457. Treasury yields hovered close to pandemic highs, with the benchmark 10-year yield up 1.6 basis points to 1.9358%.

Oil prices eased on Tuesday ahead of talks between the United States and Iran officials, which could lead to the removal of U.S. sanctions on Iranian oil sales. Brent crude was last down 0.4% to $92.29 a barrel after hitting a seven-year high of $94 on Monday. Spot gold prices were steady at a 1-week high at $1,822 per ounce.

Reporting by Anshuman Daga; Additional reporting by Tom Westbrook. Editing by Gerry Doyle

SYDNEY, Feb 7 (Reuters) – Asian share markets eased on Monday after stunningly strong U.S. jobs data soothed concerns about the global economy but also added to the risk of an aggressive tightening by the Federal Reserve.

Geopolitics also remained a worry as the White House warned Russia could invade Ukraine any day and French President Emmanuel Macron prepared for a trip to Moscow. The cautious mood saw MSCI’s broadest index of Asia-Pacific shares outside Japan (.MIAPJ0000PUS) dip 0.1% in early trade. Japan’s Nikkei (.N225) fell 0.4% and South Korea (.KS11) 0.6%.

Both S&P 500 futures and Nasdaq futures were little changed, after last week’s market turmoil saw Amazon.com Inc gain almost $200 billion while Facebook-owner Meta Platforms Inc (FB.O) lost just as much. BofA analyst Savita Subramanian noted company guidance for 2022 had weakened significantly with most stocks falling following earnings reports.

“Commentaries suggested worsening labour shortages and supply chain issues, with a bigger headwind expected in Q1 than in Q4,” Subramanian said in a note. With wages being the biggest cost component for companies, margin pressure was set to continue.

The January payrolls report showed annual growth in average hourly earnings climbed to 5.7%, from 4.9%, while payrolls for prior months were revised up by 709,000 to radically change the trend in hiring.

“The report not only indicated that payrolls were way more than anyone could have imagined, but there was exceptional strength in earnings which has to add growing concern among Fed officials about upward pressure on inflation,” said Kevin Cummins, chief U.S. economist at NatWest Markets.

Consumer price figures for January are due on Thursday and could well show core inflation accelerating to the fastest pace since 1982 at 5.9%. As a result, markets moved to price in a one-in-three chance the Fed might hike by a full 50 basis points in March and the real prospect of rates reaching 1.5% by year end. That sent two-year yields up 15 basis points for the week, the biggest rise since late 2019, and they were last standing at 1.31%.

In currency markets, the euro continued to bask in the glow of a newly hawkish European Central Bank as markets brought forward the likely timing of a first rate rise and sent bond yields sharply higher. Klaas Knot, the Dutch Central Bank President and a member of the ECB’s governing council, said on Sunday he expects a hike in the fourth quarter of this year.

The single currency was taking in the view at $1.1456 , having shot up 2.7% last week in its best performance since early 2020. Technically, a break of resistance around $1.1482 would open the way to $1.1600 and higher. The dollar fared better on the Japanese yen as the market still sees little chance the Bank of Japan will tighten this year. It was steady at 115.27 yen , while the euro was up at 132.06 yen having climbed 2.7% last week.

The wild swing in the euro left the U.S. dollar index down at 95.436 , after shedding 1.8% last week. Gold was a shade firmer at $1,808 an ounce , but has been struggling in the face of higher bond yields.

Oil prices were up near seven-year highs amid concerns about supply given by frigid U.S. weather and ongoing political turmoil among major world producers. Brent added another 32 cents to $92.97 a barrel, while U.S. crude rose 42 cents to $91.89.

By Wayne Cole, Editing by Sam Holmes