Much of yesterday's market moves are unwinding as gold falls back through $2000 and WTI crude falls $6 per barrel. The euro is up nearly a full cent to 1.1000.
These are clear reversals of war trades that have surged in the past three weeks.
The simple message is that the market is more optimistic about the end of hostilities. Perhaps that's the case but a less-optimistic case might be that the market is seeing a crescendo in sanctions and companies abandoning Russia. Some holdout companies including McDonalds, Coca-Cola, Pepsi and Starbucks announced plans to suspend operations yesterday. We've also seen Germany dig in on not imposing energy sanctions.
With that, the market is trying to assess what the scope is for Russia to get its commodities onto the world market and how long the disruption will last.
The problem is that I don't really know what we're trading on here and I'm not sure anyone does. It's a 'war-on/war-off' trade in the same way that 'risk-on/risk-off' often prevails.
On the direct war front, humanitarian corridors opened today in six Ukrainian cities. That's seen as good news (and it's obviously good in the real world) but it could also be a temporary storm before a fresh round of attacks.
