Daily Market Commentary 23rd February 2022

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Global equity markets tumbled as the Ukraine situation deteriorated, following the Russian Governments decision to recognise the Ukrainian breakaway Donbass Republics independence. Putin followed this up by moving troops into the break-away Republics, to defend them against Ukrainian Government troops. European and US sanctions have been announced, in response, but the situation is certainly turning ‘hot’. Equity markets tumbled, but US Bond Yields and the Dollar was relatively stable. The EUR traded 1.1330, while the GBP held around 1.3600.

The commodity currencies were beneficiaries of the softer reserve, with the AUD trading above 0.7200, while the NZD broke back above 0.6700. The RBNZ meet today and are expected to raise rates, again, in an effort to combat surging inflation. The revelations will be in the language and how hawkish the sentiment is. US markets will begin to focus on the PCE number, the important measure of inflation for the Federal Reserve, due to be released later in the week. Geo-Political tensions remain disruptive to markets and will continue to spread uncertainty.

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