Stocks Fall With Bonds on Invasion Concern: Russia Reality Check

Markets are reacting in real time to tension in Ukraine following Russia’s March incursion into Crimea and subsequent annexation of the Black Sea peninsula.

The Micex Index fell 1.7 percent to 1,334.66 at the close in Moscow, extending its loss since Feb. 28, a day before President Vladimir Putin’s intervention, to 7.6 percent. The yield on local-currency bonds due February 2027 rose 16 basis points to 9.8 percent, pushing its increase in the period to 144 basis points. The ruble, which has weakened 0.8 percent since February, retreated 0.2 percent to 36.1695 per dollar.

The chart shows the performance of stocks, bonds and the ruble, along with indicators of Russian investment risk. The top panel displays the value of the Micex Index of 50 stocks, government debt in the Bloomberg Russia Local Sovereign Bond Index, and the ruble relative to the dollar.

Credit-default swap rates on Russian bonds due in five years appear in the bottom panel. The yield gap between Russian debt and U.S. Treasuries and the one-month implied volatility of the ruble are also tracked.

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