Russia’s currency hit a new all-time low and its borrowing costs a five-year high Monday, after the E.U. threatened tougher sanctions against Moscow in retaliation for its sending troops and military equipment to Ukraine.
Western European markets also suffered from what threatens to be another economically disruptive escalation of the conflict, with the French, German and U.K. stock indexes all heading lower. They were helped in that direction by a series of downward revisions to economic surveys for August–surveys that were themselves overshadowed by the Ukraine conflict.
The ruble hit an all-time low of 37.503 against the dollar in early trading in Moscow, and also fell to a four-month low against the euro. Meanwhile, the yield on Russia’s ruble-denominated 10-year bonds rose as high as 9.89%, its highest since October 2009.
Newsflow over the weekend had been overwhelmingly negative, as a summit meeting of the E.U.’s 28 member states agreed…
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