Treasuries Climb, Stocks Drop on Nuclear Concern: Markets Wrap

(Bloomberg) — US Treasuries climbed and European stocks and US futures erased earlier gains as investors sought safer assets amid concern the conflict in Ukraine could escalate.

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The Stoxx 600 index was down 0.2% and US contracts pointed to a similar drop for the S&P 500 at the Wall Street open. The yield on 10-year Treasuries fell four basis points to 4.37%, extending Monday’s drop. A gauge of dollar strength traded little changed, while gold prices rose 0.5%.

The moves came after Russian President Vladimir Putin signed a decree allowing Russia to fire nuclear weapons in response to a massive conventional attack on its soil, including by drones. Russia will view aggression against itself or its allies by a non-nuclear state backed by other nuclear powers as a joint attack, the document posted online said.

The statement follows US President Joe Biden’s decision to allow Ukraine’s Volodymyr Zelenskiy to attack military targets in Russia using US-made long-range weapons.

Key events this week:

• Eurozone CPI, Tuesday

• US housing starts, Tuesday

• Fed’s Jeff Schmid speaks, Tuesday

• China loan prime rates, Wednesday

• Nvidia earnings, Wednesday

• Fed’s Lisa Cook and Michelle Bowman speak, Wednesday

• Eurozone consumer confidence, Thursday

• US existing home sales, initial jobless claims, Philadelphia Fed factory index, Thursday

• Eurozone HCOB Manufacturing & Services PMI, Friday

• US University of Michigan consumer sentiment, S&P Global Manufacturing & Services PMI, Friday

Some of the main moves in markets:

Stocks

• The Stoxx Europe 600 fell 0.1% as of 8:53 a.m. London time

• S&P 500 futures were little changed

• Nasdaq 100 futures were little changed

• Futures on the Dow Jones Industrial Average fell 0.2%

• The MSCI Asia Pacific Index rose 1.1%

• The MSCI Emerging Markets Index rose 0.7%

Currencies

• The Bloomberg Dollar Spot Index was little changed

• The euro fell 0.3% to $1.0570

• The Japanese yen rose 0.7% to 153.54 per dollar

• The offshore yuan fell 0.2% to 7.2406 per dollar

• The British pound fell 0.2% to $1.2657

Cryptocurrencies

• Bitcoin rose 0.4% to $91,773.07

• Ether fell 1% to $3,117.72

Bonds

• The yield on 10-year Treasuries declined five basis points to 4.37%

• Germany’s 10-year yield declined seven basis points to 2.30%

• Britain’s 10-year yield declined six basis points to 4.41%

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