Investors ‘navigating a world of rising risks’

Investors ‘navigating a world of rising risks’

Risks in financial markets are increasing, and investors had a snapshot of what sort of market reaction could come if Russia invades Ukraine.

Last Friday saw the US warn of an imminent attack which sent oil prices 5% higher over two trading days, with Brent fast approaching the $100 price tag. Equity markets also suffered steep losses as the S&P 500 dropped 1.9%, and the Nasdaq Composite tumbled 2.8%. Asian markets are catching up with Friday’s Wall Street losses with Japan’s Nikkei falling more than 2%, while markets in China, Hong Kong, and South Korea are all in the red.

The S&P 500, Nasdaq, and Dow Jones Industrial futures are all pointing towards a cautious start for the week, and US Treasuries are stable as investors await more information.

The deterioration in the Russia situation is stoking massive concerns about price pressures as it could lead to disruption in energy and agricultural supplies. Markets are already on edge over how central banks will act to tame inflation, currently sitting at multi-decade highs. Moreover, US consumer price data released on Thursday gave a strong impression that central bank policymakers have been caught off guard and need to speed up the tightening cycle.

Interest rates futures