Investors rush to react as ruble falls to 15-month low after failed Russian coup
Global investors rushed yesterday to react to the knock-on effects of Russia’s failed mutiny as the ruble fell to a 15-month low against the US dollar.
Commodity prices for oil and wheat and defense industry stocks were in the spotlight, with some big moves in early trading.
Experts also tried to figure out how events might affect inflation and interest rates.
George Lagarias, chief economist at Mazars, said: “Russia is very important to the global supply chain as a major energy supplier and commodity exporter.
Further instability could, in theory, contribute to inflationary pressures if we thought that supply chain problems were behind us.’
Kickback: The ruble weakened to 87.23 against the dollar before strengthening to 84.25
Last year’s Russian invasion of Ukraine drove up energy and food prices, accelerated cost-of-living pressures and reshaped European industry.
But with concerns about growth in the world’s largest economies – the US and China – the price of a barrel of Brent crude rose 60 cents to $74.45.
Phil Flynn, an analyst at Price Futures Group, warned that Russian political instability could exacerbate supply shortages.
Elsewhere, Chicago wheat futures – the global benchmark for the commodity – hit four-month highs on concerns about the situation in Russia, a major exporter, before pulling back on profit-taking.
And defense industry investors downgraded stocks that have made big gains since the invasion.
Shares of BAE Systems fell 2 percent, while Italy’s Leonardo and France’s Dassault also fell, as did America’s Lockheed Martin.
The ruble weakened to 87.23 against the dollar before strengthening to 84.25.