News coming from the east shook the world this morning. Russia has attacked Ukraine, and Vladimir Putin has warned that any attempt to attack Russia will end in unimaginable consequences.
There have been bombings in Ukraine, including an airport near Kiev, and Russian military incursions into the Donetsk and Luhansk republics. Combining the military actions with the Russian president's statements, one could conclude that we may be facing a huge show of force in order to be able to annex the two self-proclaimed republics in eastern Ukraine much more easily. All this is not without consequences for financial markets.
A barrel of Brent Crude oil today at one point already cost USD 100, which means that only since the beginning of the year (and we are only at the end of its second month) it has increased by over 30%. Gold, considered a safe haven in uncertain times, also seems to be growing, reaching USD 1950 per ounce. Silver, on the other hand, looks set to rise by more than 7.5 percent to USD 25 per ounce in 2022.
On the other side of potential returns seem to be risky assets where a bear market could continue. The Nasdaq 100 index has already fallen more than 20 percent from its peak to the 13,000 point area. Thus, it may have entered a model bear market. Meanwhile, the German DAX, having earlier overcome possible support at 14800 points, seems to have already reached 14000 points, falling this morning by over 3 percent.
Meanwhile, on the currency market, one cannot forget to mention the Russian ruble, which seems to be breaking records of weakness. For one dollar you have to pay over 86 rubles this morning, where at the beginning of the month it was around 75 rubles.
In addition, the contract for the so-called VIX fear index exceeded the level of 33 points and for a moment was quoted at the highest level in a year. This can only show how much fear prevails in the markets today, which can be attributed to the great geopolitical uncertainty, further steps by Russia and actions by the West.
Daniel Kostecki, Director of the Polish branch of Conotoxia Ltd. (Forex service)
Materials, analysis and opinions contained, referenced or provided herein are intended solely for informational and educational purposes. Personal opinion of the author does not represent and should not be constructed as a statement or an investment advice made by Conotoxia Ltd. All indiscriminate reliance on illustrative or informational materials may lead to losses. Past performance is not a reliable indicator of future results.
CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 79.17% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
Trade this news from Conotoxia Ltd. platforms
Go to your account
