- US believes Putin told Russian military he plans to invade Ukraine - report
- White House: We are not saying Putin has made a final decision
- The reports continue: Biden indeed told leaders that Putin decided to attack next week
- Biden and Putin to talk on the phone on Saturday
- US Feb UMich consumer sentiment 61.7 vs 67.5 expected
- New York Fed releases schedule to buy bonds as planned
- Bank of England won't consider bond sales until rates hit 1%
- Baker Hughes US oil rig count 516 vs 497 prior
- Gundlach: Does not see a 50 BP hike in March
- Hong Kong confirmed a record 1,325 covid cases; death of 4-year-old boy
Markets:
- Gold up $34 to $1861
- US 10-year yields down 10 bps to 1.93%
- WTI crude up $3.79 to $93.67
- S&P 500 down 70 points to 4433
- JPY leads, AUD lags
That market was continuing to digest higher US inflation and the scope for a 50 basis point hike in March in the early part of the session. Yields had started to move higher again and that was causing a bit of concern.
Then the state of play was completely upended after a PBS report citing six sources that said Biden told allies that Putin had told Russian military officials that he had decided to invade Ukraine. The report had details about two days of bombardment and electronic warfare followed by an invasion.
Those details -- and that it came 90 minutes after a Biden call with world leaders -- was credible enough to make the market think it was real. The reaction was swift with the yen surging, ruble dropping the most since March 2020, oil climbing $3 and stocks sinking.
The White House dialed it back shortly after, saying they didn't know if Putin had made a decision. However it's impossible to believe anyone outside the White House leaked the report. Later, foreign reports said Biden told world leaders that Putin had made the decision with one report said the attack could start Tuesday.
So we're now into the fog of war.
One thing today's price action gives us is a sense of what will work and what won't if/when the bullets start flying. The yen was the go-to safe haven and I think that's the clearest trade given other moving parts around possible sanctions and reflexiviity from the Fed.
Keep a close eye on the weekend news. It looks like this is going to be the trade for awhile.
