Ukraine concerns loom of financial markets

Midday Update

Financial markets remain are braced for more bearish news at the start of the week, as more NATO military equipment and soldiers continue to build on the border, as the situation with Russia remains extremely tense.

The US dollar has gained slightly since last Friday, while oil prices, once of the main movers over the Ukraine/Russia invasion news, is holding onto all last week’s gains as traders await the latest news developments.

Classic war safe-have trades, silver and gold, are down marginally after yesterday’s huge breakout to the upside. Both metals have substantial upside potential if the situation escalates further this week.

Stocks are also bleeding lower. The Nikkei 225 is catching up with US stocks in terms of losses and is trading down by over 2 percent today, while the Dow Jones Industrial Average is taking the biggest hit of the large US indices.

Ukraine’s President Zelensky and US President Biden spoke on the phone over the weekend, and Zelensky has invited Biden to Kiev to calm the situation. He noted “I am convinced that your arrival in Kyiv in the coming days, which are crucial for stabilizing the situation, will be a powerful signal and contribute to de-escalation.”

Ukraine has called for a meeting with Russia and other members of a key European security group over the escalating tensions on its border. Foreign Minister Dmytro Kuleba said Russia had ignored formal requests to explain the build-up of troops.

Foreign Minister Dmytro Kuleba also said the “next step” was requesting a meeting within the next 48 hours for “transparency” about Russia’s plans. An hour-long call between President Biden and Russian leader Vladimir Putin the day before failed to yield a breakthrough.

Bitcoin and other cryptos have had a soggy weekend. The crypto king is trading below the $42,000 level over Ukraine concerns, while altcoins appear to be bleeding the most, with Ethereum and Litecoin sharply down from the monthly highs.

Market data is very light today, leaving more scope for the market to focus on last week’s US CPI report, and of course Ukraine tensions which are likely to remain in the forefront of traders mind, especially with February 16^th seen a deadline day.