KEY THEMES
Global equities slipped notably yesterday, as the escalation of Russia-Ukraine conflict entered a very critical phase. This took place as Russia has amassed military forces on Ukraine’s borders, with Russian President Putin ordering troops to enter the Russian-controlled areas of southeast Ukraine, following a decision to recognize the territories as independent states. As a result, U.S. equity indices were heavily traded in the red on Tuesday, alongside other global equity markets in Europe and Asia. In response, the U.S. President Joe Biden announced sanctions targeting Russia's sale of sovereign debt abroad and the country's elites. We note that the Russian ruble rose slightly by 2.6% since yesterday’s low. However, a glimmer of hope sparked that the underlying escalation will not develop into a full-blown military conflict. As we speak, many future equity indices are trading in the green territory in light of expectations that Russia could be subject to more severe economic sanctions as opposed to going with a military option. In addition, the rally in commodities and safe havens has slightly calmed after reaching very elevated levels on Tuesday. While it is unclear which way the situation may develop, the only constant in global markets now is volatility.