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Shares are falling, oil is above $ 110 after Russia’s sanctions bite

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Broker reacts while trading at its computer terminal at a brokerage firm in Mumbai, India, February 1, 2020. REUTERS / Francis Mascarenhas

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MSCI Asia former Japan -0.56%, Nikkei -1.68%

Euro Stoxx, DAX futures point to a lower opening

Brent oil jumped above $ 110, the highest level since early July 2014

Biden has announced a ban on Russian flights using US airspace

Yields in the US are recovering from eight-week lows

SHANGHAI, March 2 – Asian stocks came under renewed pressure on Wednesday as oil prices jumped above $ 110 a barrel as investors worried about the impact of aggressive sanctions against Russia on invading Ukraine.

European stock markets were set to open weakly after Tuesday’s crash, with Euro Stoxx 50 futures down 0.13% and German DAX futures down 0.17% in early deals. FTSE futures rose 0.34%.

In the latest tightening of restrictions on Moscow, the United States has banned Russian flights using US airspace following similar actions by the European Union and Canada.

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US President Joe Biden announced the ban during a speech on the state of the union on Tuesday, in which he also said that Russian President Vladimir Putin would “pay a long price” for the invasion of Ukraine. Read more

MSCI’s broadest Asia-Pacific stock index outside Japan (.MIAPJ0000PUS) fell 0.56% and China’s blue chip index CSI300 (.CSI300) fell 1.12%.

Japan’s Nikkei (.N225) fell 1.68%.

In Australia, the base index ASX 200 (.AXJO) rose 0.28% despite the risk-averse risk aversion elsewhere as rising commodity prices boosted miners’ shares.

“The Russia-Ukraine conflict is likely to continue to dominate markets for the foreseeable future. Yesterday’s announcement that Russia will not pay coupons to foreign holders on its sovereign debt should push investors further to asylum,” ING analysts said in a note. .

“Support for the start of the EU membership process for Ukraine shows the unity of support for Ukraine from Western Europe, but is unlikely to help ease tensions.”

On Tuesday, the S&P 500 (.SPX) and Nasdaq Composite (.IXIC) closed about 1.6% lower, while the Dow Jones Industrial Average (.DJI) fell nearly 1.8%.

Global sanctions against Russia have prompted a number of large companies to announce the suspension or exit of their business in the country.

Exxon Mobil (XOM.N) said on Tuesday it would leave operations in Russia, including oil fields, following similar decisions by British oil giants BP PLC and Shell and Norway’s Equinor ASA. (EQNR.OL) read more

Exxon’s announcement comes as the price of oil continues to rise. On Wednesday, global oil Brent exceeded $ 110 a barrel, rising more than 5.8% to $ 111.09, the highest level since early July 2014.

US crude oil West Texas Intermediate jumped nearly 6% to $ 109.30, the highest level since September 2013.

The rise came despite a global agreement to release 60 million barrels of crude reserves to try to contain rising prices and rising inflationary pressures.

“We believe there is still room for oil prices to continue to rise,” said Carlos Casanova, senior economist for Asia at UBP in Hong Kong. “So much depends on political factors and ensuring that some of the supplies coming from Russia are offset by (not only) more oil than American shale, but also from Iran.”

In the foreign exchange market, the dollar rose 1.88% against the ruble to 107.01 after reaching a record high of 117 days earlier.

The dollar was also stronger against the yen, rising 0.12% to 115.03, while the euro fell to $ 1.1112. Against a basket of currencies of other major trading partners, the dollar strengthened 0.15% to 97,464.

The rise in greenbacks came as US government bond yields recovered after falling to an eight-week low on Tuesday. The changing outlook for global growth has prompted investors to cut bets that the Federal Reserve will aggressively raise interest rates in the coming months.

The 10-year reference yield in the United States rose to 1.7309% from 1.711% late on Tuesday, and the politically sensitive 2-year yield rose to 1.3205% from 1.305%.

Fed funds futures markets now value only a 5% chance of an increase of 50 basis points at the Fed meeting in March, although a smaller increase of 25 basis points is seen as virtual security. FEDWATCH

In a speech Tuesday, Biden called on companies to produce more cars and semiconductors in the United States so that Americans can rely less on imports as a way to fight inflation.

Gold, which peaked at an 18-month high last week and rose nearly 2 percent on Tuesday amid a worsening crisis in Ukraine, returned 0.57 percent to $ 1,932.11 an ounce as the dollar strengthened.

Bitcoin, which rose nearly 15.5 percent on Tuesday due to the strengthening of identity data for a conflicting currency, read more, was 0.23% lower at $ 44,341.68.

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Report by Andrew Galbraith; Edited by Sam Holmes

Our standards: ‘ principles of trust.

Shares are falling, oil is above $ 110 after Russia’s sanctions bite Read More »

Experts reject fears that Russia will use cryptocurrency to circumvent sanctions: “Completely unfounded”

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Cryptocurrency experts say the concerns expressed by high-ranking politicians about Russia’s avoidance of economic sanctions with the help of cryptocurrency are “completely unfounded.”

They say the crypto market is not big enough or deep enough to sustain the volume Russia needs, and that the country’s digital asset infrastructure is minimal.

Former US Secretary of State Hillary Clinton and current European Central Bank President Christine Lagarde are among high-ranking officials worried that the cryptocurrency could provide a means for Russia to circumvent the heavy financial sanctions imposed on its invasion of Ukraine.

The country is largely cut off from the SWIFT cross-border transaction system, and businesses in the United States and other Western countries are banned from doing business or doing business with Russian banks and the National Welfare Fund.

The head of the policy in the promoter of the crypto policy of the Blockchain Association in the USA Jake Chervinsky published a long Twitter the end on March 2, explaining how “Russia cannot and will not use cryptocurrency to evade sanctions.”

1 / Russia cannot and will not use cryptocurrency to avoid sanctions.

Concerns about the use of cryptocurrencies to avoid sanctions are completely unfounded. They are fundamentally misunderstood:

– how sanctions work
– how crypto markets work
– how Putin is actually trying to ease sanctions

I will explain

– Jake Chervinsky (@jchervinsky) March 1, 2022

Chervinsky cited three reasons why Russia is unlikely to use cryptocurrency to circumvent US sanctions. The first is that sanctions are not limited to US dollars, and it is now illegal for any American business or citizen to make deals with Russia. He said”It doesn’t matter if they use dollars, gold, seashells or bitcoins.”

The second reason is that the financial needs of a nation like Russia far exceed the current capabilities of the crypto markets that Chervinsky Called “Too small, expensive and transparent to be useful to the Russian economy. In other words, even if Russia had access to sufficient liquidity, it would still not be able to hide its transactions in such a market.

Finally, the country spent years trying to “prove sanctions”, but failed to build any significant crypto infrastructure or even finalize crypto regulations. Chervinsky says cryptocurrency simply does not appear to be part of Russia’s plans to mitigate the effects of the sanctions.

“The reality is that Putin’s years have been trying to protect Russia from sanctions, and cryptocurrency is not part of his plan. His strategy included diversifying Russia’s reserves into yuan and gold (not cryptocurrencies), redirecting trade to Asia (not the blockchain), bringing production to land, and so on.

However, Roman Bieda, head of fraud investigations at the Coinfirm blockchain research platform, told Al Jazeera on March 1st that it was generally possible to use crypto to “avoid sanctions and hide wealth,” as has been done. from North Korea, Venezuela, and Iran.

But other experts told the publication that Russia’s case is different due to the scale of sanctions, its slow pace of cryptocurrency adoption and lack of market depth.

Ari Redboard, head of legal and government affairs at cryptocurrency investigator TRM Labs, said blockchain transparency was a natural deterrent to sanctioning the avoidance of sanctions in this case.

“Russia cannot use cryptocurrency to replace hundreds of billions of dollars that could potentially be blocked or frozen.

Cointelegraph reported on 25 February that ECB President Lagarde was eager for the cryptocurrency markets (MiCA) bill to be passed by the European Parliament as soon as possible to give the European authorities funds so that “cryptocurrencies can actually be captured. Lagarde called for urgent policies to prevent Putin from evading cryptocurrency sanctions.

In an interview with Rachel Madow on MSNBC this week, Hillary Clinton called on US President Joe Biden to ban Russia from trading in cryptocurrencies. She and Madou discussed threats to national security that could exist with regard to cryptocurrency, and Clinton said:

“I was disappointed to see some of the crypto exchanges, not all, but some of them refuse to stop transactions with Russia by some philosophy of libertarianism.”

Related: European Parliament postpones vote on cryptocurrency bill due to proof of work

Democratic Sen. Elizabeth Warren also took the opportunity on March 1 to condition that US financial regulators should check digital assets because they risk “allowing Putin and his associates to avoid economic pain.”