Financial markets are on the defensive and digesting the news that a missile landed outside the Polish village of Przewodow, about 6.4 kilometers west of the Ukrainian border on Tuesday.
It is also noteworthy that around the same time Russia was launching its biggest wave of missile attacks against Ukrainian cities for more than a month.
The circumstances surrounding the incident, which marks the first time a NATO country has been directly hit in nearly nine months of conflict, remain unclear. It is not known who fired the missile or where it was fired from, although the Polish Foreign Ministry described it as “Russian-made”.
Both Russian and Ukrainian forces used Russian-made munitions during the conflict, with Ukraine deploying Russian-made missiles as part of its air defense system.
Poland, the G20, G7 and NATO are attempting to dial down their response to the Tuesday missile attack on Poland to avoid any escalation to the unfortunate incident.
Poland and NATO used language that suggested they were not treating the missile blast as a Russian attack. Later in the Asian session US President Biden did the same.
More bad news from China after we had the mainland reporting more than 20,000 local COVID-19 cases today. This is the highest case count since April.
From Australia we had wages data. The q/q result was the highest since March of 2012, beating the expected +0.9% q/q rise to come in at +1.0%. This is still well under the inflation rate, that is, real wages are falling.
The result is higher than the RBA forecast, but given the RBA dismissed the latest surging inflation. The wages data is not going to prompt a +50bp rate hike at the December (6th) meeting. +25 appears to be the base case.