Dow dropped 152, modestly ahead of decliners & NAZ went up 83. The MLP index rose 4+ to the 202s & the REIT index fell 5+ to 453. Junk bond funds only fluctuated & Treasuries were very heavily sold, taking the yield on the 10 year Treasury down a huge 11 basis points to 1.88% (more below). Oil jumped almost 4 to the 95s & gold soared 27 to 1910.
AMJ (Alerian MLP index tracking fund)
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The US is blocking financial transactions of Russian central bank assets, effectively freezing any of those assets held by Americans. The freeze is effective immediately, a senior administration official said in a briefing today. The official said that the US's actions are in conjunction & cooperation with the EU, Japan, the UK, Canada & others. This means that not only will Russia not be able to access funds in $s, they will be unable to use $s in the other countries turn to other banks & other currencies. By making the move effective immediately, before markets open, the official said, Russia will be unable to move assets to avoid or mitigate the consequences. "Our strategy," the official said, "is to make sure that the Russian economy goes backward as long as President Putin decides to go forward with his campaign." Russian Pres Vladimir Putin held a meeting with economic advisers on the global sanctions hammering his country, calling the West an "empire of lies." Among those present at the Kremlin meeting was Russian Central Bank Governor Elvira Nabiullina, First Deputy Prime Minister Andrei Belousov, Deputy Prime Minister Alexander Novak & Finance Minister Anton Siluanov. The intended effect, the official added, is to cripple the Russian economy & use up the country's "rainy day fund" as their currency, the ruble, plummets in value. That rainy day fund was built up to defend against economic consequences when Russia invaded Crimea in 2014. According to the Treasury Dept's Office of Foreign Assets Control (OFAC), this is not a complete & total block of the central bank, as OFAC is authorizing certain transactions with Russia's central bank that are "energy-related," & that additional authorizations could follow if necessary.
US effectively freezes Bank of Russia assets held by Americans
Ukraine has vowed it will not surrender to Russia, as talks are held between delegates from both countries following days of clashes across Ukraine. “Ukraine is ready to continue seeking a diplomatic solution, but Ukraine is not ready to surrender or capitulate,” Foreign Minister Dmytro Kuleba said. The comments come as Ukrainian & Russian officials hold talks in Belarus, which neighbors the 2 countries, aimed at de-escalating hostilities following Russia's invasion of Ukraine last week. Going into the discussions, Ukraine said it wants an immediate cease-fire & the withdrawal of Russian forces, which have attacked various cities & areas of northern, eastern & southern Ukraine. Meanwhile, troops are approaching the capital Kyiv from the north. Kuleba said he did not know whether the talks were still ongoing & was unconvinced they would be successful. “I’m a diplomat, I have to believe in the success of talks, but at the same time my main goal as a diplomat now is to impose more sanctions on Russia, to bring more weapons to Ukraine and to isolate Russia as much as we can in the international arena so I’m focused on this part of diplomacy,” he said. “We stand not only for ourselves but for the world order as we all know it,” he added.
Ukraine 'not ready to surrender or capitulate' to Russia, foreign minister says
Treasury yields slid, as investors monitored developments in the Russia-Ukraine conflict. The yield on the benchmark 10-year Treasury note slid nearly 12 basis points to 1.866% & the 30-year Treasury slid more than 8 basis points to 2.211%. Yields move inversely to prices & 1 basis point is equal to 0.01%. Investors have been piling into safe haven investments like gov bonds since Russia launched an invasion on Ukraine Thurs, which has pushed yields lower. Russia continued to advance into Ukraine over the weekend. Russian military vehicles entered Ukraine's 2nd-largest city Kharkiv, with reports of fighting taking place & residents being warned to stay in shelters. Russian Pres Vladimir Putin put his country's nuclear deterrence forces on high alert yesterday amid a growing global backlash against Russia's invasion of Ukraine. Despite the escalation, Ukraine's Defense Ministry said representatives for Ukraine & Russia have agreed to meet on the Ukraine-Belarus border “with no preconditions.” Western allies have announced more sanctions against Russia. The US, European allies & Canada agreed Sat to remove key Russian banks from the interbank messaging system, SWIFT.
Treasury yields slide as fresh sanctions are imposed on Russia
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