Squawk Box Europe Express

U.S. President Joe Biden and Western allies impose a barrage of sanctions against the Kremlin and close associates, spooking markets with the S&P 500 sinking into correction territory. As part of the sanctions measures, Germany freezes the certification of the Nord Stream 2 pipeline but former Russian President Dmitry Medvedev warns of a “brave new world” of spiralling gas prices in Europe. The EU sanctions 351 Duma members and 27 other individuals or bodies suspected of undermining Ukrainian sovereignty. And in corporate news, Rio Tinto boasts its strongest balance sheet in 15 years amid surging global commodity prices.

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President Putin orders his forces into the rebel-held eastern Ukrainian regions of Donetsk and Luhansk, sending Asian equities and U.S. futures into a nosedive. U.S. President Biden signs an executive order to slap sanctions on the breakaway regions, with further action promised – as well as from the UK and the EU. HSBC hikes guidance as FY profits more than double. And U.K. Prime Minister Boris Johnson lifts all Covid-era restrictions in England but warns that a virus resurgence remains a possibility.

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Presidents Biden and Putin agree to in-person talks proposed by French President Emmanuel Macron. The White House, however, says the meeting is contingent on Russia not crossing into Ukrainian territory. Speaking to CNBC at the Munich Security Conference, German Chancellor Olaf Scholz says he believes the West should refrain from revealing its sanctions plan for now – even as Ukraine’s President calls for immediate action. Swiss lender Credit Suisse is forced to defend its working practices following a data leak which reportedly shows it held accounts for a variety of criminals and sanctioned dictators. And in England, all Covid-era restrictions are set to be lifted as Prime Minister Johnson lays out his plan for living with the virus.

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The Dow suffers its biggest drop of the year, falling more than 600 points on renewed Russian-Ukrainian tensions. The White House claims Moscow is close to engineering a false-flag incident before invading, after border skirmishes. German insurance giant Allianz reports a Q4 loss on the back of a €3.7bn U.S. fund implosion charge. And Tesla CEO Elon Musk causes a storm on Twitter by likening Justin Trudeau to Adolf Hitler, before slamming the SEC, accusing it of attempting to curb his free speech in its oversight of his communications with stakeholders.

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We have a slew of European earnings today. British Asia-focused lender Standard Chartered misses on the bottom line despite full-year pre-tax profits more than doubling. French plane maker Airbus smashes FY profit records and resumes dividend payouts. We will also have earnings from Schneider Electric, Commerzbank and Kering. U.S. markets have a mixed session and close flat following the release of Fed minutes which suggest little support for robust tightening. Meanwhile, the U.S. and Ukraine cast doubt on Russian claims of troop withdrawals - and President Volodomyr Zelenskyy says Moscow is doing the opposite, concentrating even more forces along Ukraine’s north-eastern border. 

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U.S. equities snap a three-day losing streak as tensions between Russia and Ukraine show some signs of easing. Crude prices remain stable as Russia claims to withdraw some forces from the border, but President Biden warns that the West will remain alert to further moves by Moscow in the region. In China, factory prices surge more than 9 per cent for the year despite inflation figures coming in lower than expected. We also hear from ECB board member, François Villeroy De Galhau who says that the central bank may begin winding down its asset purchase programme but that talk of rate hikes remains “premature”.

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The U.S. is to temporarily move its embassy from Kyiv to the western Ukrainian city of Lviv after U.S. Secretary of State Antony Blinken warns of a dramatic increase in Russian troops along the border. German Chancellor Olaf Scholz is due in Moscow later today for talks with President Putin. The tensions are felt throughout U.S. markets which closed lower and saw the 10-year Treasury yield briefly surpass 2 per cent. CNBC hears from St Louis Fed President James Bullard who says the Federal Reserve must act sensitively when hiking rates. Ongoing uncertainty about a potential Russian invasion of Ukraine has also hit crude prices which had been at a seven-year high. However, BP CEO Bernard Looney tells CNBC his company is committed to its business in Russia. 

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It’s been a weekend of high-end diplomacy throughout Eastern Europe. President Biden has spoken to both President Putin and his Ukrainian counterpart Volodomyr Zelenskyy after U.S. intelligence suggested that a Russian invasion of Ukraine could happen “any day now”. Germany is among more than a dozen nations warning its citizens to leave Ukraine as Chancellor Olaf Scholz prepares to visit Kiev in a show of solidarity. Tensions are felt across Asian equities after Wall Street saw a late sell-off on Friday while crude prices surge over the $95 mark. In France, Les Républicains presidential candidate Valérie Pécresse holds a major rally in Paris. Her spokesperson Alexandra Dublanche tells CNBC she represents a serious threat to Emmanuel Macron.  

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US consumer prices surge to a 40-year high in January, sending the 10-year Treasury yield past the 2 percent mark. But, President Biden tells NBC he still believes price pressures will ease despite persistent inflation prints. Markets respond as yields spike and the Dow drops more than 500 points, with hawkish comments from St. Louis Fed President James Bullard compounding the tech stock losses. Meanwhile, talks in Berlin fail to de-escalate the Russia-Ukraine crisis. The UK Foreign Secretary's mission to Moscow also comes up short, after sharp exchanges between Liz Truss and Sergei Lavrov. And France goes all in on nuclear. President Macron announced the country’s “nuclear renaissance,” after giving the green light for at least half a dozen new reactors, which he says will help push the country towards carbon neutrality.

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Credit Suisse posts a more-than CHf2 billion net loss in the fourth quarter, as the embattled lender claims this will be a "transitional year" following a series of scandals. Net income at Société Générale almost quadruples in the fourth quarter, boosted by strong equity trading revenues as the French lender says it is entering 2022 with confidence. Strong demand in China and the U.S. sees L'Oréal full-year revenue jump 16% - as CEO Nicolas Hieronimus hails an "historic year" for the beauty group. And, Disney shares jump in extended trade as streaming subscriptions beat estimates and theme park business roars back to life. CEO Bob Chapek tells CNBC the decision to raise prices at peak times is just part of the "circle of life".

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