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We start the week off safe in the knowledge that markets are going to hop from headline to headline. The conflict in Ukraine continues to intensify and will remain the primary driver of market movements this week.
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Focus remains squarely on Ukraine today. The conflict continues to intensify and it seems that Russia is making a concerted effort to capture Ukraine’s capital, Kyiv.
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It has happened, Russia has pulled the figurative trigger by launching what it calls a demilitirisation operation in Ukraine this morning. Martial law has now been declared in Ukraine with its foreign minister labelling the incursion an all-out invasion.
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The saying that it never rains but pours feels appropriate today. Ironically the weather forecast in what has been a very wet Johannesburg is dry despite looming clouds following warm summer days.
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President Putin recognised two separatist republics in eastern Ukraine overnight, escalating geopolitical tensions.
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Which will come first – the talks between Russia and the US or a Russian invasion of Ukraine? Only time will tell.
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The week continues with the themes not changing all that much. Markets continue to eye the situation around Ukraine with nervousness, and speculate over monetary policy moves, particularly by the Federal Reserve.
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The world remains on tenterhooks over the tension around Ukraine. The latest is that the US still believes a diplomatic solution is possible, but have also cautioned that the Russian army remains positioned to invade Ukraine.
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Sarcastic remarks by the Ukrainian president sent markets tumbling, with US markets closing weaker yesterday despite recovering from the initial rout.
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Posturing and speculation over the potential of Ukraine by Russia has intensified. The US has warned that Russia will be able to launch an assault on Ukraine this week, but don’t seem certain it will happen. Thus trading this week begins with sentiment turning to risk-off.
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RMB's research offering spans across the fixed income, currency and credit markets to offer strategic insight to our clients across multiple sectors and markets.