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Update 1:07 PM ET: Putin says he will recognize Donetsk and Luhansk in Eastern Ukraine as independent states.
The decision further complicates peace talks and could be a significant step before an invasion.
Crude oil up 1.7%. Nasdaq futures down 1.9%, S&P futures down 1.2%, Dow futures down 0.9%.
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Major European bourses ended down Monday with focus still on the potential of Russia invading Ukraine.
Wall Street is closed for the Washington’s Birthday holiday.
The Frankfurt DAX -2%, London FTSE-100 -0.4% and Paris CAC-40 -2% finished down.
The German 10-year Bund yield rose 2 basis points to 0.21%.
Nasdaq 100 futures (NDX:IND) -1.7% are the weakest, while S&P futures (SPX) -1.1% and Dow futures (INDU) -0.8% are down.
The White House has agreed “in principle” to a summit with President Joe Biden and Russian President Vladimir Putin if Russia does not invade Ukraine in the “coming days.” A Kremlin spokesman said there are “no concrete plans” for a summit but it remains an option.
Putin said he would decide later Monday whether to recognize separatists in eastern Ukraine.
A “limited invasion of Donbas would be aA temporary headwind on risk assets, but we would not view that as a bearish gamechanger unless it spiraled into a broader conflict between Russia and the NATO (which again is unlikely at this point),” Kinsale Trading said.
The other big topic on investors’ minds is the Federal Reserve.
Federal Reserve Michelle Bowman looked open to a half-point rate hike in March in a speech at an American Bankers Association conference, saying inflation is “way too high.”
“I will be watching the data closely to judge the appropriate size of an increase at the March meeting,” Bowman said in prepared remarks, according to Reuters. “I intend to support prompt and decisive action to lower inflation.”
What are retail investors buying and selling? See Goldman’s new screen.
