Markets in Turmoil Following Russia's Military Campaign in Ukraine
24 February 2022
On Thursday, traders sold every risk asset as Russia started a special military campaign in Ukraine, targeting military infrastructure, air defense facilities, military airfields, and aircraft.
According to a TASS report citing a speech, Russian President Vladimir Putin announced a special operation to "protect" Ukraine's Donbass (Donbas) region. While Putin said that while Russia has no plans to occupy Ukraine, he urged Ukrainian forces to put down their arms and go home and that Russia would not let Ukraine secure nuclear arms, the report added.
The government in Kyiv called it a "full-scale invasion" as it declared martial law and called for international support, including harsher sanctions on Russia.
US equity futures plunged 2-3%, EU benchmarks were down nearly 4%, and the Russian equity index listed in USD dropped circa 50%, the most on record before the Russian exchange halted trading.
US bonds were in demand, pushing their yields notably lower, while gold and oil rocketed higher. Gold traded at 1,950 USD an ounce, while oil pressed above the psychological level of 100 USD for the first time since July 2014. More gains are likely to come unless the situation de-escalates.
Macroeconomic news will probably be ignored today, including the usual Thursday's jobless claims, GDP revision for the fourth quarter, new home sales, and PCE indices.