Experts expect European markets to have a cautious opening on Tuesday with the turbulent sociopolitical climate. Investors are prepping for more shifts in the market caused by sanctions against Russia. That may result in higher commodity prices, especially concerning gas and certain agricultures. However, a follow-up threat is rising inflation, which already looms over the continent.
At 2:10 ET, we could see DAX futures that slid 0.3% over the previous day, indicating some worry. Other major European country indexes, such as the CAC 40 in France and FTSE 100 in the UK, also slid, albeit not as drastically. The caution is in the face of new sanctions that European countries and the US may choose to impose on Russia.
Joe Biden, the president of the US, accused Vladimir Putin, the president of Russia, of war crimes. The transgression came from civilian killings in Ukraine, specifically in the town called Bucha. Russia denied the claims so far, stating that they happened after their forces left the area.
Olaf Scholz, the Chancellor of Germany, strengthened Biden’s statement. He said that Russia would notice the consequences of its aggressive actions against civilians.
Jake Sullivan, the national security advisor for the Biden administration, stated that the US would introduce new sanctions. The country will present the measures within the week. The US has already stopped Russia from paying out sovereign debt by freezing Russian reserves in US banks. $600 million were frozen that way.
However, many believe that the next significant blow comes from the EU declining Russian energy imports. That’s especially true for Germany, that’s highly reliant on Russian gas, which presents other issues in the political and economic sphere. As German banks are reducing their growth expectations, the import halt may freeze the country’s growth entirely. Bank executives predict that in that case, a recession would be nearly guaranteed.
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