According to the article by Bloomberg, traders are reevaluating the effect go the Russian-Ukraine War on trading strategies.
Volatility in both stocks and bonds have fallen in the past few days. Russia has paid off some of its debts using dollars instead of a default, thus avoiding a default on payments. However, the country is till on hooks for more foreign-currency payments, thus maintaining a significant default risk. China has pledge to boost its economy.
Investors will also be analyzing the effects of the Fed' first rate hike on the U.S. economy, when there is concern regarding a recession following an inverted yield curve for Treasury bonds (this article is only available for Bloomberg Professionals subscribers).
Commodity linked currencies are in spotlight due to the high price of natural resources. Japan has asked the UAE to increase the export of crude oil, and Australia has stopped exporting shipments of aluminum to Russia.
Officials at the Bank of Russia are looking to purchase domestic sovereign bonds soon in an effort to stabilize the country.
It will very interesting to see how all of this plays out in the future. Investors would be taking on huge risks if they plan to invest in the current volatile market.
ReplyDeleteIn a complex environment of high inflation in the United States, the pandemic and the Ukraine-Russia war, there are too many uncertainties. Investing now must be prudent.
ReplyDeleteThe stock market has been unstable since the beginning of the invasion. Recently, Putin, the president of Russia, decided that all loans from now on will be paid in rubles. He has given the following order to the prime minister. I am curious how it will work.
ReplyDelete