Headlines:
- Russia says a number of military drills have finished, troops expected to return to bases
- Kremlin says US warnings that Russia would attack Ukraine on Wednesday is baseless
- Russia's Lavrov says will continue dialogue with the West
- NATO secretary general says haven't seen signs of de-escalation on the ground
- Oil slumps by over 3% on the day on hopes of Russia de-escalation
- Gold sinks on Russia-Ukraine de-escalation hopes
- Germany February ZEW survey current condition -8.1 vs -7.0 expected
- UK January jobless claims change -31.9k vs -43.3k prior
- Eurozone Q4 GDP second estimate +0.3% vs +0.3% q/q prelim
- Spain January final CPI +6.1% vs +6.0% y/y prelim
Markets:
- EUR leads, JPY lags on the day
- European equities higher; S&P 500 futures up 1.6%
- US 10-year yields up 3.7 bps to 2.033%
- Gold down 1.2% to $1,848.62
- WTI down 3.6% to $91.98
- Bitcoin up 4.9% to $44,290
It's still all about Russia-Ukraine tensions and the latest update is that there is hope for de-escalation as Russia says that it will be pulling back some troops as "military drills come to an end".
The news helped risk trades to roar in European morning trade, with equities surging higher and the likes of gold and oil tumbling as a result. Despite NATO secretary general Stoltenberg saying that they haven't seen evidence of reduced Russian military presence, markets are still sticking with the more optimistic side of the coin - at least for now.
US futures were more tepid early on but have surged higher with S&P 500 futures up 1.6% and Nasdaq futures up 2.2%. Bonds were also offered as safety flows abated with 10-year Treasury yields climbing back above 2% on the day.
In FX, the dollar eased lower alongside the yen with EUR/USD moving up from 1.1310 to 1.1350 and AUD/USD climbing from 0.7100 to 0.7156 before gains are trimmed slightly. USD/JPY also moved higher from 115.30 to 115.70 on the session.
Elsewhere, gold tumbled strongly after having traded to fresh eight-month highs early on. The yellow metal dropped from $1,879 to $1,845 and is still down over 1% on the day now.
Oil was arguably the worst hit amid the news with WTI crude sinking from $94.50 to a low of $91.66 before keeping closer to $92.00 at the moment.
While the latest news from Moscow is encouraging, we still have to wait and see how things materialise in the hours/days ahead to be certain.
