Fresh arrival of war troops, machines near Ukraine-Russia border escalate risk-off mood

Early Tuesday morning in Europe, chatters over a satellite image conveying fresh arrival of troops and attack helicopters, ground-attack aircraft and fighter-bomber jets to forward locations on the Russia-Ukraine border gained momentum.

The news from local media also includes, “Ground units also appear to be in attack formations.”

It’s worth noting that an ambiguous date of February 16 is seen as the D-Day for the Russian invasion of Ukraine despite no official confirmation.

Elsewhere, Russian Foreign Minister Sergey Lavrov told President Putin that the US had put forward concrete proposals on reducing military risks and that he could see a way to move forward with talks. However, Russia’s Lavrov also mentioned that EU and NATO responses have not been satisfactory, which in turn highlights risk-off mood despite easing fears.

FX implications

Given the recent market attention on the Russian headlines, such news weigh on the market sentiment and favors risk-safe assets, like gold and the US dollar. Also, oil prices get additional support, other than from softer USD, as supply fears will rise should Russia invade Ukraine.

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