Russia says:
- Reports that Ukrainian forces have fired mortars & grenades on LPR locations
- Russian state media also reporting shelling in Donetsk
- Kremlin says hopes people will not believe fake reports about new Russian invasion date
- Russian foreign minister says Moscow will send response to US on security guarantees today
- Russia, Belarus to hold live fire exercises on Thursday and Saturday - report
Ukraine says:
- Ukraine denies shelling separatists' positions in East Ukraine
- Ukraine military says Russian-occupying forces fired on village in Luhansk region
- Details on the reported Russian attack as suggested by the Ukraine military
- Ukraine government source says shelling from rebel territory 'looks like a provocation'
Everything else:
- ECB's de Cos says should not make hasty conclusions on policy timeline
- Switzerland January trade balance CHF 3.18 billion vs CHF 3.69 billion prior
Markets:
- NZD leads, CAD lags on the day
- European equities mixed; S&P 500 futures down 0.3%
- US 10-year yields down 4.2 bps to 2.00%
- Gold up 0.9% to $1,885.91
- WTI down 2.0% to $91.79
- Bitcoin down 1.8% to $43,290
Another day, another episode of he said, she said as Russia and Ukraine throw accusations of aggression at each other.
Things kicked off in late Asia Pacific trading where Russia accused Ukraine of attacks on four LPR localities - which was denied later on by Ukraine itself. Thereafter, Ukraine threw back its own accusation that Russia fired on a village in Luhansk, shelling a kindergarten. Russia didn't deny that though but kept up its rhetoric from yesterday that its troops are retreating.
It remains to be seen how things will play out as tensions remain high and even though Russia is trying to portray a less aggressive stance, it's tough to say what exactly will happen at the end of the day.
The initial response was a quick shove lower in risk trades, with the yen and dollar bid before the greenback giving most - if not all - of that back in European morning trade. The aussie and kiwi saw a significant bounce as well as such.
AUD/USD moved up from 0.7150 to 0.7210 and is holding near the highs for the day now. NZD/USD saw a similar move from 0.6660 to 0.6715. Meanwhile, EUR/USD also pared its earlier drop from 1.1325 to 1.1370 though USD/JPY kept lower and is down 0.4% to near 115.00 at the moment.
The yen move is holding as bonds are still more bid with 10-year Treasury yields down over 4 bps to 2.00%. Elsewhere, equities remain more subdued but at least off earlier lows with S&P 500 futures down 0.3% and European indices more mixed.
In the commodities space, gold is the big gainer as it jumped to fresh eight-month highs - hitting above $1,890 - amid the back and forth headlines. Oil prices are more subdued and keeping lower by nearly 2% below $92 as an Iran nuclear deal draws closer.
