The market reaction is to sell risk and think about the specifics later, understandably so. But just take note that what we are hearing so far have all been from Russian media sources, so it remains to be seen how concrete this all is.
There's talk that such open fire in the region is not uncommon but the thing is, the situation now is rather delicate and sensitive - hence, the market reaction. Also, there are some suggestions this could be the false flag that Russia is trying to put out in order to set a pretext for an imminent invasion. Only time will tell how this all plays out.
There might be scope for Ukraine to defend themselves and deny the headlines but we'll see.
For now, risk trades are put on the backfoot with equities marked lower. S&P 500 futures are down 0.5% and Nasdaq futures down 0.7%. There is a flight to safety to bonds with 10-year Treasury yields down 6 bps to 1.985% currently.
Elsewhere, the dollar and yen are more bid although gains have been trimmed slightly. That said, commodity currencies are the ones pressured the most still with AUD/JPY having dropped from near 83.30 to a low of 82.35 before keeping around 82.60 levels at the moment. Price is hanging on at its key daily moving averages for the time being:
The 200-day moving average (blue line) @ 82.33 is the key technical support to watch, after having seen buyers test key trendline resistance (white line) from earlier in the day.