Russia-US tensions hurt global markets as Putin lowers nuclear strike threshold

Global stocks fell on Tuesday and investors fled to safer assets, as global markets reacted to rising tensions between the world’s two biggest nuclear powers: Russia and the United States.

Pan European Stokes 600 The stock index was down about 1 percent at 12:23 p.m. London time, at 498.56 – its lowest level since August. In the US, stock futures linked to the Dow Jones Industrial Average fell 0.5%, S&P futures fell nearly 0.2%, while Nasdaq 100 futures fell 0.1%.

The reduction comes after Russian President Vladimir Putin amended Russia’s nuclear doctrine, which outlines the conditions that would force Moscow to deploy its nuclear weapons. Toss reported. Tuesday.

Critically, Russia has now broadly expanded the circumstances under which it would consider a nuclear retaliation to include “the mass launch of enemy aircraft, missiles and drones targeting Russian territory, these including crossing the Russian border, and attacking its ally Belarus,” Tass said.

The prospect of a possible nuclear escalation drew investors to safe-haven markets. to sleep Prices were up 0.8 percent at 11:52 a.m. London time. In currency markets, Japanese yen By 12:26 a.m. London time, the euro and the US dollar were up 0.7% and 0.36%, respectively. Meanwhile, the Swiss franc gained 0.3 percent against the euro.

“The sharp drop in bond yields and USDJPY was certainly notable, but I think it’s even more telling,” Wells Fargo macro strategist Eric Nelson told CNBC via email regarding the exchange rate between the US dollar and the Japanese yen. That’s how quickly it was over.”

“There is still clearly a bias for higher inflation and stronger growth as we head into the final weeks of the year. Market participants likely recall the headline risk from the early stages of the Russian-Ukraine war and Will likely tend to fade. Any decline in yields and USDJPY as long as any signs of growth remain more verbal in nature.”

Although Moscow signaled an interest in updating its nuclear doctrine months ago, the revisions came within days of a U.S. decision to allow Kiev to use U.S.-made long-range missiles on Russian soil. are being done. War in Ukraine.

Tiffany McGee, CEO and CIO of Pivotal Advisors, told CNBC’s “Worldwide Exchange,” “The conflict is escalating … there’s clearly some kind of knee-jerk, knee-jerk reaction. I expect.”

He stressed the need to assess the market impact in the long term, however, noting similar short-term reactions since Russia launched a wholesale attack on its neighbor in February 2022.

“But in terms of the long term, this is the third year of the conflict and while initially we saw price increases … it’s kind of low,” he said.

Oil markets, which have been most directly affected by the war following Western sanctions on Russia’s oil supplies, edged into negative territory on Tuesday despite the growing prospect of a clash between the world’s two biggest crude producers. stay in

snow The Brent Agreement With January expiry, it was down 0.37% at 12:33pm London time, with the first month of December Nymex WTI Futures were down 0.74%, both from Monday’s settlements.