LONDON : Russia's invasion of Ukraine has disrupted economies and markets around the world, from energy and food prices to European banks, emerging market stocks and the Russian currency.
The impact on other safe havens such as governments bonds is complicated, however. Yes, U.S. and European bond prices rose in the days following Russia's invasion as investors sought safety in top quality assets. Pre-war, Russia supplied over 30 per cent of Europe's gas, most of it through a network of pipelines, thousands of kilometres long. Once Western sanctions hit, the flows of gas dried up. Energy prices soared, bringing the threat of blackouts, recession and a worrying switch back to dirtier sources of fuel.
Last year the U.N. food agency's average price index hit its highest level on record, up 14.3 per cent from the previous year. The index had already gained 28 per cent in 2021. Graphic: World food prices off highs https://www.reuters.com/graphics/UKRAINE-WAR/GLOBALECONOMY/zgvobkygjpd/chart.pngThe past year has seen wild swings for Russia's currency - a more than 50 per cent tumble following the invasion to record lows in March, followed by a more than 200 per cent rise to a multi-year high in June thanks to soaring energy prices, FX restrictions and the central bank ramping up interest rates.
Graphic: Rouble's troubles https://www.reuters.com/graphics/UKRAINE-ANNIVERSARY/jnvwyaydqvw/chart.pngEuropean banks took a drubbing when Russia invaded Ukraine. Since then, those that have slashed links have outperformed and those that have not continue to see their shares take a hit.