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Early Risk Aversion Fades Away


The initial round of risk-off flows has been unwound, despite the absence of headlines that could assuage fears of further escalation in the Russia/Ukraine standoff. On a somewhat speculative note, a relatively guarded speech from Ukraine's President Zelensky and second thoughts on the potential for Russian aggression beyond the de facto borders of self-proclaimed Donbas republics might be playing a role here, although it must be noted that Western leaders keep warning against imminent Russian aggression and working on sanctions against Moscow.

  • SEK leads gains among major currencies and it has proven to show large sensitivity to the Russia/Ukraine crisis. The Antipodeans have regained poise, while safe haven currencies have lost their initial allure.
  • Spot USD/RUB surged past the RUB80.00 mark, topping out at RUB80.54 before easing off. The rate showed at its best levels since early November but has now recouped most of its initial losses.
  • While Russia/Ukraine headlines are poised to remain front & centre, the global data docket features German Ifo survey as well as U.S. Conf. Board Consumer Confidence & PMI figures. Speeches are due from Fed's Bostic, BoE's Ramsden & Norges Bank's Olsen.

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