Market snapshot, theatre of war

Olivier Desbarres
2 min readMar 8, 2022


Since the Russian army’s full-scale invasion of Ukraine on 24th February most equity markets, government and corporate bond yields, commodity prices (energy, metals and agriculture), CDS spreads and major currencies have recorded significant intra-day volatility and outsized daily moves.

Moreover, for all the “noise”, the current geopolitical crisis has accentuated multi-week trends in a number of financial market and economic variables. Price of Brent crude oil, natural gas and gold has risen sharply and global equities have continued to tumble.

The Dollar — which market-to-market was broadly unchanged between 13th January (its 2-month low) and 23rd February — has since appreciated to a 17-month high. The previously unremarkable and normally risk-sensitive Australian and New Zealand Dollars have outperformed all major currencies (bar the Colombian Peso). Conversely, already underperforming European currencies — namely CE3 currencies, the Swedish Krone and Euro — have depreciated sharply against the US Dollar.

However, and just as notably in our view, the S&P 500, which fell 11.9% between 3rd January (record-high) and 23rd February, has since weakened only 0.6%.

The market’s pricing of Federal Reserve rate hikes at its 16th March policy meeting has been stable around 25bp so far this month. US 2-year Treasury yields have been range-bound around 1.5% in the past month.

Russian Rouble has collapsed but other high-yielding Emerging Market currencies have as a whole fared reasonably well. Beyond Central European currencies there has so far been limited currency contagion within the EM space.

Most major Asian currencies in the past fortnight have, mark-to-market, either been broadly unchanged or only depreciated modestly against US Dollar.

Financial markets are being light-footed, which has generated much intra-day and daily volatility, but are seemingly not always prepared to take medium-term directional positions at this current and extremely uncertain juncture.

Sign up for a 30-day free trial with 4X Global Research and gain access to exclusive content from Olivier Desbarres



Olivier Desbarres

Olivier Desbarres is Founder of 4X Global Research, providing substantive research and analysis on Emerging and G20 economies and fixed income markets.