What you should know on Tuesday, February 15:
Tensions between Russia and Ukraine dominated financial markets on Monday, generating strong safe-haven demand. The catalyst was a statement by US President Joe Biden, who told his Ukrainian counterpart, Volodymyr Zelensky, on Sunday that the United States would respond “quickly and decisively” if Russia takes further steps toward invasion.
Earlier Monday, Russian Foreign Minister Sergey Lavrov told President Putin that the United States had put forward concrete proposals to reduce military risks and that he could see a way forward in the talks, though he added that the responses from the EU and NATO have not been satisfactory. Fears have partially dissipated, although risk aversion continues.
As the day draws to a close, there are no signs of progress in the diplomatic talks, but on the contrary, Ukrainian President Zelensky reported that he has suspicions that Russia is likely to attack the country on Wednesday, February 16, declaring it a national holiday. Unity Day.
The US dollar and gold benefited the most in a risk-off environment, with the former further buoyed by comments from the US St. Louis Fed president on inflation reports showing increasing inflationary pressures. greater.
A tight macroeconomic calendar exacerbated risk-related trading, with little on the agenda until next Wednesday, when the US is due to release retail sales and FOMC meeting minutes.
EUR/USD is trading below 1.1300, while GBP/USD hovers around 1.3520. Commodity-linked currencies are little changed against the US dollar amid surging gold and oil prices.
World indices tumbled and Wall Street accelerated its decline before the close. Government bond yields retreated, with the 10-year Treasury yield now at around 1.96%.
Gold rose to a new 2022 high of $1,872.85 a troy ounce, holding close at this point. Crude prices also soared, with WTI trading at $95.25 a barrel.
Source: Fx Street
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