• richard evans

War in Europe

Good morning


Russia have launched a full-scale attack on Ukraine, a move many thought we wouldn’t see. The action was announced by Putin at 6am local time, 3am our time. Equity markets are a sea of red, US dollar is higher and the traditional safe-haven currencies such as CHF and JPY also make gains. Gold is sharply higher, moving up to almost $1950.


As I type GBPUSD is 1.3485, EURUSD 1.1245, EURGBP 0.8340 (GBPEUR 1.1990). EURCHF briefly traded below 1.0300 but now at 1.0350, USDJPY now 114.70, off its 114.40 lows, EURJPY also off its 128.40 lows, now trading 129.05. Oil prices spike higher as well, Brent is up 6% at $103, WTI up a similar amount to $98. This is the first time since 2014 Brent has been above $100. Back then petrol was around £1.30/litre. Its higher than that now, nearer £1.50/litre and I’m assuming its only going up from here.


I won’t write much here on the actual situation in Kyiv (can someone explain what happened to ‘Kiev’). Even the major news broadcasters have little information so I’m not going to be able to add anything new that isn’t simply taken off the internet that you can all find, whether its all to be believed I really don’t know. Obviously there is talk of further sanctions, this won’t stop the invasion but will, I presume, be far more harsh and wide-reaching than those announced recently.


I know Ukraine has a decent army but I do have a feeling Russia could sweep them aside with overwhelming force. Early reports already suggest Russia has taken out Ukraines air defences and if so their air superiority already gives them a strong hand. I wouldn’t blame Ukraine at all if they put up little resistance, this would almost be better than a long drawn-out war. I’m not sure if that is sensible or cowardly.


While Putin’s aims may lie in Ukraine, is Putin looking to rebuild the Soviet Union? Should other countries such as Estonia, Latvia, Lithuania and even Poland be worried? As NATO members, it is perhaps unlikely but then again it wasn’t that long ago that a global pandemic didn’t seem possible. USDPLN which yesterday was at 3.9900, has traded up to 4.15, a move of 4%. A lot of that is down to USD strength but Poland will probably soon find itself as a neighbour to Russia. I don’t like it.


The other area we must not forget is Taiwan. Will China be watching this move to judge how their takeover of Taiwan will be taken by the global community. I talk about it as though it is a certainty, for me it is. Hope I’m wrong on that one as well but if anything its possible China have more claim on Taiwan than Russia does on Ukraine.


We do have some US data this afternoon in the form of GDP and retail sales, big releases but I’m thinking that focus will certainly be on the Ukraine crisis.



- 13.30 US GDP, initial jobless claims, PCE

- 15.00 US new home sales

- 16.00 ECBs Schnabel speaks

- 17.00 Feds Mester speaks

- 18.00 BoEs Pill speaks

- 21.45 NZ trade balance, retail sales

- 23.30 Japan Tokyo CPI

- 00.01 UK GfK consumer confidence

- 07.00 German GDP


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