The beginning of Monday in Russia was quite positive: the ruble strengthened, reacting to the announcement of the summit of the leaders of Russia and the United States, mediated by France.

The situation deteriorated sharply after the heads of the DPR and LPR turned to Putin with a request to recognize the independence of the republics. Over the weekend, the situation in the LDNR deteriorated sharply: on Friday, the evacuation of citizens to the Russian Federation was announced. Towards the evening, President Putin held an extraordinary extended meeting of the Security Council of the Russian Federation on the recognition of the LPR and DPR.

Oil quotes rose noticeably on Monday, reacting to the likely imposition of sanctions against Russia, the world's leading oil producer. Restrictions may lead to interruptions in the supply of raw materials, further exacerbating its market shortage. Prices for Brent oil updated the highs of 2014, adding three dollars, and by the end of the day rose above $97 per barrel. Low-liquid trades aggravated the situation due to the holiday in the USA.

While Europe admits that it cannot do without energy and resources from Russia, the banking sector is under attack. Trading volumes on Monday were record-breaking, which indicates the withdrawal of large players from the market.

It is also worth paying attention to retailers and technology companies, which may find it difficult to work abroad or import goods and technologies. These sectors will show the most volatility depending on how events unfold.

The current situation is tightening financial conditions for Russian companies, destabilizing markets and reducing business predictability. The volatility of the ruble and the closure of the Russian market for global capital will hurt the economy, probably sending it into decline in the coming quarters. In the long term, this threatens to reduce growth potential, which is already lower than that of many developed countries. Such conditions translate for the population into a drop in living standards through a decrease in real incomes or (at best) a dramatic slowdown in their growth.