Headlines:
- Russia's Lavrov: EU, NATO response to security proposals have been unsatisfactory
- Kremlin says if Ukraine renounced joining NATO, it would significantly address concerns
- G7 finance ministers say prepared to impose economic, financial sanctions on Russia
- Ukraine ambassador to UK: Ready for concessions to avoid war, but nothing to do with NATO
- Fed's George: Too soon to say if March would see 50 bps rate hike
- BOJ steps in with ETF purchases for the third time this year
- Switzerland January producer and import prices +0.6% vs -0.1% m/m prior
- SNB total sight deposits w.e. 11 February CHF 725.1 bn vs CHF 725.0 bn prior
Markets:
- CHF leads, NZD lags on the day
- European equities lower; S&P 500 futures up 0.2%
- US 10-year yields up 0.5 bps to 1.956%
- Gold down 0.3% to $1,853.80
- WTI down 0.6% to $92.50
- Bitcoin down 0.3% to $42,416
Russia-Ukraine tensions are gripping markets to start the week, with the market mood keeping rather tense and nervous.
Risk trades were shoved lower in early European trading only to produce a bit of a turnaround in the past 20 minutes after Russian foreign minister Lavrov put out a word on two on diplomatic talks.
European indices started the day lower in a catch up to Friday before extending losses to over 3% at one point. They are still down by over 2% now as fear continues to ripple in the hearts of investors.
Meanwhile, S&P 500 futures were flattish early on before turning lower by 0.9% and then now storming back to near flat levels after Lavrov's remarks.
In FX, the dollar, yen and franc are the main beneficiaries but have seen gains trimmed considerably after Lavrov's comments hit. USD/JPY hit a low of 115.02 but is now trading back up to 115.44. Meanwhile, EUR/USD was down to 1.1301 but has crept back up to 1.1328 and GBP/USD from 1.3496 to 1.3535 currently.
AUD/USD also pared its earlier decline in a move from 0.7090 to 0.7130 and is holding just below that now.
There's still no telling where the whole Russia-Ukraine saga is going next but if the light bounce here is any indication, it is that if military confrontation is averted, expect risk trades to jump very quickly on the news.
