(Bloomberg) — The European Union called an emergency in-person summit of the bloc’s leaders for Thursday, as Russia faced the threat of further sanctions from western nations following its recognition of two breakaway regions in eastern Ukraine.
Ukraine’s government said that banks and ministry websites suffered another cyberattack on Wednesday. Kyiv earlier moved toward declaring a nationwide state of emergency which would allow Ukrainian officials to impose restrictions on movement and media for an initial 30 days.
President Vladimir Putin said that he remains open to “diplomatic solutions” so long as Russia’s interests and security are guaranteed.
Key Developments
- Biden’s First Round of Russian Sanctions Fail to Shock
- Villeroy Emphasizes ECB Flexibility as Ukraine Crisis Deepens
- Germany Says It Can Do Without Russian Gas. That’s a Tall Order
- European Energy Prices Extend Rally as Russia Sanctions Pile Up
- Russian Markets Reeling, With Ruble Record Low in Sights
All times CET:
European Stocks Close Lower (5:36 p.m.)
European stocks ended the day lower as U.S. equities continued to extend losses amid rising tensions with Russia over the Ukraine standoff. The Stoxx Europe 600 fell 0.3% while the S&P 500 declined 0.7%, erasing earlier gains on positive sentiment that Western sanctions on Russia were initially limited.
“There was some optimism among investors we spoke to as the White House’s Russia sanctions were not as sweeping as originally expected, but our sense is that this saga is far from over and most of our contacts expect both additional sanctions in the days ahead as well as a targeted legislative package,” wrote BTIG’s Isaac Boltansky.
Fears the Ukraine tension could snarl commodity supplies bolstered everything from energy to wheat and nickel. Oil resumed a rally with Brent crude reaching $98 a barrel. Gold climbed. Meanwhile, the CBOE Volatility index, or so-called fear gauge, climbed to the highest since late January.
EU Leaders Set to Discuss Future Sanctions (5:25 p.m.)
The EU’s leaders will discuss trigger points for potential future sanctions against Russia, according to two officials familiar with the plans who asked not to be identified because the preparations are private.
The EU has a broader package of sanctions prepared in the event Moscow escalates further.
Link to EU announcement on sanctions
EU to Hold Emergency Summit on Ukraine (4:25 p.m.)
European Union leaders will hold an emergency summit in Brussels Thursday to discuss the situation in Ukraine. European Council President Charles Michel, who chairs the meetings, said they’ll discuss latest developments and how to hold Russia accountable for its actions.
“The aggressive actions by the Russian Federation violate international law and the territorial integrity and sovereignty of Ukraine,” Michel said in the invitation letter to the 27 leaders. “It is important that we continue to be united and determined and jointly define our collective approach and actions.”
Stock Erase Gains on Cyberattack (4:20 p.m.)
U.S. and European equities erased gains after Ukraine said several government and bank websites had been subject to a cyberattack.
The S&P 500 and Stox Europe 600 were little changed after each had gained more than 0.9% earlier in the session. The yield on the benchmark 10-year Treasury note rose to nearly 2%. Meanwhile, oil extended gains with Brent crude reaching almost $99 a barrel.
Banks, Government Sites Hit by DDOS Attack (4:07 p.m.)
The government confirmed an Interfax report that its websites came under attack.
Several government websites as well as some banks faced a DDOS attack around 4 p.m. local time, the Minister of Digital Transformation Mykhailo Fedorov said on social network Telegram.
Ukraine has faced two waves of cyberattacks since late January. The most recent, last week, hit the country’s largest banks, which restored operations in full within a few hours. The Feb. 15 DDOS-attack was the largest in Ukraine’s history and the U.S and the U.K said Russia was behind it.
Cyberattack on Ukraine Government Sites Reported (3:50 p.m.)
Several Ukrainian government websites including those of the Cabinet of Ministers and the parliament suffered cyberattacks Wednesday, according to news agency Interfax. It didn’t say anything about the source.
The web pages of ministries including the Foreign Ministry and the Defence Ministry are either temporarily out of order or are not operating smoothly. The respective press offices acknowledged problems with the sites, but didn’t elaborate on the reason.
U.S. Stocks Rise on Limited Sanctions Fallout (3:37 p.m.)
U.S. equities rose with European stocks as investors assessed limited initial Western sanctions against Russia amid the Ukraine standoff.
The S&P 500 gained 0.8%, after falling into a technical correction Tuesday, while the tech-heavy Nasdaq 100 added 1%. Meanwhile the Stoxx Europe 600 rose 0.8% while the MOEX Russia index added 1.6%.
“Markets are trading with a positive tone overnight as they seem to be taking comfort with the relative pace of what is happening in Russia/Ukraine,” wrote Brad Bechtel, global head of FX at Jefferies LLC. Crude oil fluctuated. The dollar slipped while the ruble rebounded from steep losses. Gold was little changed.
U.S. Signals Sanctions to Ratchet up (3:25 p.m.)
Daleep Singh, the U.S. deputy national security adviser for international economics, told CNN that more sanctions on Russia will come.
Asked if no further measures would be taken if Russia doesn’t cross the contact line, Singh said: “No, costs continue to ratchet higher. The violation of Ukraine’s territorial integrity and its sovereignty are unacceptable.”
The initial U.S. sanctions announced yesterday were criticized as too limited in scope.
Russia’s Dollar Bonds Can’t Escape Blow of EU, U.S. Sanctions
EU Bans Trade, Investments in Breakaway Regions (3:20 p.m.)
The European Union will ban the import of goods coming from the Donetsk and Luhansk regions. Member states will also prohibit investments in entities and the acquisition of real estate in the breakaway territories in eastern Ukraine, according to the draft text of the EU sanction package adopted on Wednesday and seen by Bloomberg.
In addition, the bloc will ban exports to these regions in sectors from transport and telecommunications to energy. Tourists won’t be able to travel there from member states or by using EU planes or vessels.
Zelenskiy Calls for Stronger Sanctions on Russia (3:10 p.m.)
Ukrainian President Volodymyr Zelenskiy said he expects international sanctions on Russia to be strengthened and praised Germany’s decision to halt the Nord Stream 2 gas pipeline from Russia. “It must become irreversible,” Zelenskiy told a press conference in Kyiv alongside his Polish and Lithuanian counterparts. “We expect further steps to increase sanctions pressure.”
The three presidents signed a joint declaration that “Ukraine deserves EU candidate status” and that Lithuania and Poland will support it in achieving that goal.
Zelenskiy said he cannot predict what next steps Russia and Russia-backed separatists will take, but added that he relies on the Ukrainian army. “We are ready for everything,” he said.
ECB Stress Tests Banks’ Exposure to Russia (2:45 p.m.)
The European Central Bank is telling lenders active in Russia to report on the risks they face from a range of diplomatic and military scenarios related to Moscow’s tensions with the West over Ukraine, according to people familiar with the matter.
The Frankfurt-based ECB is working with banks to assess risks to their liquidity, loan books, trading and currency positions as well as their ability to keep operations running, said the people, who asked to remain anonymous as the discussions are private.
The regulator, in touch on a daily basis in some cases, wants lenders to assess scenarios including severe economic sanctions as well as the real-world consequences of an invasion, they said.
ECB Stress-Tests Banks’ Russia Exposure as Putin Pushes Ukraine
Western Banks That Stayed in Russia Face a Test (2:15 p.m.)
Lenders who maintained operations in Russia after the 2014 annexation of Crimea – enticed by the profit even as many peers fled the scene – now face a test after Putin’s moves this week ratcheted up tension and drew fresh punitive measures.
Italian and Austrian lenders have actually increased business in Russia since 2015, according to data from the Bank for International Settlements compiled by Bloomberg Intelligence. France’s Societe Generale SA, Italy’s UniCredit SpA and Austria’s Raiffeisen Bank International AG are the European banks with the biggest Russian operations.
EU to Ban Russian Bonds in Sanctions Package (12:20 p.m.)
The EU is set to ban the purchase of Russian government bonds as part of proposed sanctions on Moscow. The measures will prohibit the purchase or sale of “transferable securities and money-market instruments issued” by Russia, its government, the Russian central bank or entities acting on the latter’s behalf, according to draft documents seen by Bloomberg.
The move is in line with measures unveiled earlier by the U.S., and it’s not clear how big of an impact it will have on Russia, which is benefiting from high energy prices and a high volume of foreign currency reserves.
EU ministers are meeting to approve the legal documents outlining the package of sanctions the bloc announced Tuesday. Member nations will then need to sign off and adopt the measures, but that’s mostly a formality.
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