Russia’s civil aviation authority bans UK flights; oil and gas prices retreat – business


Good morning, and welcome to our rolling coverage of the world economy, the financial markets, the eurozone and business.

Yesterday we woke up to the bleak news that Russia had invaded Ukraine. Today we are expecting a Russian tank attack on its capital, Kyiv, which could become the hardest day in the war, an adviser to Ukraine’s interior minister said.

Russian troops are advancing on Kyiv and Ukrainian president Volodymyr Zelenskiy pleaded with the international community to do more, saying the sanctions announced so far are not enough. An estimated 100,000 people have fled as explosions and gunfire rocked major cities, and dozens have been reported killed, according to Reuters.

You can follow the latest on our Ukraine live blog here:

Ukrainian officials are angry that European leaders have held back from imposing the potentially most damaging sanction on Russia, blocking Russia from an international payments system through which it receives foreign currency.

However, other new sanctions have been imposed by the UK, US, the European Union and other countries.

The UK has frozen the assets and imposed a travel ban on eight named individuals and 11 businesses, including six banks. Hundreds more individuals sitting on Russia’s Dumas will also face sanctions.

Michael Hewson, chief market analyst at CMC Markets UK, said:


While the sanctions set to be imposed are on a significantly stronger scale than any previous ones announced, they are unlikely to be enough to change Putin’s calculus in the short term, given that Russia’s energy markets, along with other key exports, and access to Swift were left out.

This perhaps helps explain why US markets reversed course after European markets closed, to finish the day strongly higher, with the Nasdaq 100 leading the way with a gain of over 3%, only hours after having been down 3%, soon after the market opened.

Yesterday’s surge in oil prices up to $105 a barrel also proved to be short-lived, as prices slid back after it became clear that the sanctioning of exports of Russian energy were also off the table for the moment, although prices are still elevated, with Brent back above $100 a barrel, while agricultural commodities like corn and wheat also continued to rise.

Asian shares mostly bounced back from the previous day’s losses: Japan’s Nikkei closed nearly 2% higher while South Korea’s Kospi rose 1% and Hong Kong’s Hang Seng was down 0.5%. European markets are expected to open higher after yesterday’s heavy losses.

While stock markets appear calmer, wheat prices have jumped to the highest level since 2008, threatening to push up food prices. Ukraine is a major wheat exporter and is known as the bread basket of Europe. Together, Russia and Ukraine account for a third of the world’s wheat supply.

Wheat futures in Chicago rose 2.8% to $9.6075 a bushel in early Asian trading, after surging by the maximum allowed by the exchange yesterday, while corn and soybeans also rose, Bloomberg reported. Corn rose 1.2% to $6.9825 a bushel, and soybeans were 0.8% higher.

Crude oil is trading at $101.98 a barrel, up 2.9%, after touching $105 for the first time since August 2014 yesterday. US light crude is 2.6% higher at $95.21 a barrel.

Gold, a safe-haven investment, continues to climb, rising 0.7% to $1,916 an ounce.

The Russian rouble has recovered somewhat after hitting a record low of 89.60 against the dollar yesterday. It has risen nearly 2% to 83.60.

The Agenda

  • 10am GMT: Eurozone consumer confidence final for February (forecast: 8.8)
  • 11.15am GMT: European Central Bank president Christine Lagarde speaks
  • 1.30pm GMT: US core PCE price index for January (forecast: 5.1%)
  • 1.30pm GMT: US Durable goods for January
  • 3pm GMT: US Michigan consumer sentiment final for February (forecast: 61.7)



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