Russia and Ukraine may not have strong ties to the global economy, but investors are already betting that a disruption in energy supplies will result in higher inflation, weaker growth and a devilishly difficult task for central banks.
On Thursday, Russia launched a military attack on Ukraine after weeks of tension, throwing financial markets into a tailspin. Ukraine suspended currency and equity trading, and Russia’s MOEX stock index plummeted by more than 30% after a few hours of exceptional closure. The aftershocks rippled through European, Asian and U.S. equity markets. European corporate bonds sold off too.
