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Havens Favoured as Markets Watch Russia/Ukraine Clock Ticking

FOREX
  • Haven currencies are outperforming early Monday, with markets starting the week on an acutely risk-off footing. The blunt and direct warnings from US leaders late last week that we're approaching a crunchpoint in Russia/Ukraine talks (US intelligence suggested a full invasion could occur as soon as Wednesday) continues to roil markets, putting JPY and CHF at the top of the G10 pile.
  • Resultingly, growth proxies are on the backfoot, with AUD, NZD, SEK and NOK slipping lower and reversing recent recoveries. German Chancellor Scholz is the next world leader headed to meet Putin, in the latest part of the Western attempt to de-escalate tensions - despite insistence among both Kiev and Moscow representatives that the situation on the ground is somewhat more placid.
  • The data docket is typically quiet for a Monday, with no major releases due. This should keep focus on the speaker slate, with Fed's Bullard appearing on CNBC at 1330GMT/0830ET. His comments will be watched particularly closely given his outright hawkishness last week, in which he brought up the prospect of both a 50bps rate hike, as well as the possibility of an inter-meeting hike. ECB's Lagarde follows later in the day, speaking at 1615GMT/1115ET.

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