US futures have turned flat on the news while bond yields are on the retreat after Putin's announcement. 10-year Treasury yields are down 5 bps to 3.52% on the day while the dollar and yen are gaining slight ground in the major currencies space.
It is a step up in terms of the aggression by Russia and the playbook could well see things get much worse as time goes on. That said, all there is now for markets to work with is that there is going to be added uncertainty as Russia continues to maintain a solid focus on the conflict in Ukraine. That is enough to dampen the risk mood slightly so far today.
The worry here is that there could be significant escalation as things continue to play out and Putin did not shy away from warning about that, stating that nuclear technology remains an option if Russia remains under threat amid the situation.
