Stocks Face Choppy Start Amid Tension Over Ukraine: Markets Wrap

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(Bloomberg) — Stocks may fall in Asia on Monday as investors weigh deepening geopolitical worries about Ukraine that sparked a bout of risk aversion at the end of last week.

Equity futures for Japan, Australia and Hong Kong were lower. The Swiss franc, often viewed as a haven, made modest gains. Bonds in Australia and New Zealand rose. US shares sank Friday, while Treasuries and oil rallied.

Tensions over Russia’s military buildup near Ukraine are entering a potentially decisive week, with the US warning an invasion may be imminent and President Vladimir Putin accusing America of failing to meet his demands.

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Russia has repeatedly denied it plans to invade its neighbor, and a diplomatic push to try to resolve the situation is continuing.

The uncertainty is dealing another blow to markets that are already skittish about high inflation and the prospect of aggressive Federal Reserve interest-rate hikes to tame it. A deterioration of the Ukraine situation could exacerbate concerns about prices pressures if it disrupts Russian energy supplies.

This broad backdrop is likely “to result in a far more volatile ride than 2021, and we are already seeing this,” Diana Mousina, senior economist at AMP Investments, wrote in a note.

In the latest US commentary, San Francisco Fed President Mary Daly said it’s paramount for the central bank to be measured and data-dependent as it starts lifting US interest rates to ensure stability.

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For more market analysis, read our MLIV blog.

Here are the main market moves:

Stocks

The S&P 500 fell 1.9% FridayThe Nasdaq 100 fell 3.1% FridayNikkei 225 futures fell 1%Australia’s S&P/ASX 200 Index futures dropped 0.5%Hang Seng Index futures lost 0.4% earlier

Currencies

The Japanese yen was at 115.38 per dollarThe offshore yuan was at 6.3665 per dollarThe Bloomberg Dollar Spot Index rose 0.2% FridayThe euro fell 0.1% to $1.1338

Bonds

The yield on 10-year Treasuries declined nine basis points to 1.94%Australia’s 10-year yield fell nine basis points to 2.13%

Commodities

West Texas Intermediate crude rose 3.6% to $93.10 a barrel Friday Gold rose 1.8% to $1,858.76 an ounce Friday

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