Russia started a full invasion of Ukraine, with an unprovoked attack from North (Belarus), South (Crimea), and East this morning. People worldwide are shocked by what may be the beginning of the largest military conflict in Europe since World War II.
Brent Crude rocketed through the $100 resistance for the first time since 2014 and is trading over $104 per barrel on SimpleFX.
Crude oil should be extremely hot in the upcoming weeks as Russia is the 3rd largest producer and 2nd largest commodity exporter. Geopolitical instability should increase concerns about future supply disruptions, which could spike the price.
Russia is also the largest exporter of natural gas to Europe. The country is responsible for roughly 35% of the supply.
The US 10-year Treasury fell 14 basis points to under 1.9%. Gold hit the highest since September 2020. XAUUSD behaved just like in other times of the great uncertainty in the past. If the war escalates, gold may skyrocket “to the moon”.
Asian and European stock markets are sliding, while Russian stocks crashed by 44% after the suspended trading opened on Thursday.
Unlike gold, Bitcoin failed to act as a “catastrophe hedge” and reacted just like other high-risk equities. BTCUSD fell to $34,231 among risk aversion and is trading around $35,000 amid risk aversion and is outperforming all leading altcoins.
The Russian military is already approaching the Ukrainian capital Kyiv, which would show an authentic blitzkrieg. While the US, EU, UK, Canada, and other Western countries are declaring harsh sanctions and freezing assets belonging to Russian officials, Chinese Chinese Foreign Ministry spokesperson Hua Chunying hinted Bejing is quietly supporting the invasion.
“On the one hand, we respect the territorial integrity and the sovereignty of Ukraine, but on the other hand, we must consider the historical process of the situation where Russia has been pushed into a corner and forced to counterattack,”Hua Chunying said.
Forex investors turned to the “safe haven” currencies. Dollar and yen appreciated, while the euro lost. Russian Rubel crashed to over 88 per dollar. The Polish zloty, Hungarian forint, and Czech Crown affected other currencies affected by the invasion.
German DAX30 has had the worst trading day since the CoVID-19 crash on March 18, 2020, losing over 4.6%.
NYSE futures are also down, with SPX500 losing over 5% since yesterday, NDX100 is down 6.7% already, and many tech companies’ stocks will be a hot potato when the trading starts on Thursday at 14:30 UTC.