The US believes that Russian President Vladimir Putin has decided to invade Ukraine and already communicated those plans to the Russian military, said a PBS NewsHour reporter on Twitter. Two Biden administration officials said they expect the invasion to begin as soon as next week. The reporter continued that US defense officials anticipate a “horrific, bloody campaign” that begins with two days of bombardment and electronic warfare, followed by an invasion, with the possible goal of regime change. Reportedly, the North Atlantic Council was briefed on the new intel today. 

The reports emerge shortly after the UK government advised against all travel to Ukraine and urged all British nationals to leave the nation as soon as possible while commercial means are still available. The UK government has also taken the decision to further withdraw embassy staff from Kyiv. Shortly after the UK made this announcement, the news emerged that the EU staff are also being evacuated, while the US is discussing the possibility of reducing staff numbers. The US will also pull its observers from the OSCE mission to Ukraine, sources told CNN.  

Market Reaction

In reaction to the latest reports, markets have seen a classic “risk-off” move. Safe-haven assets such as gold and US bonds have been in demand, with the precious metal rallying from around $1840 to the $1850 area. The US 10-year yield, meanwhile, is now back below 2.0% and down about 4bps on the day from previously closer to 2.03%. Meanwhile, risk assets like equities have been experiencing sharp selling in recent trade, with the S&P 500 now down 1.3% and back below its 200-Day Moving Average at 4450, having previously traded above 4500.

In G10 currency markets, the euro has been hit the worst, likely due to the Eurozone’s economic exposure to high gas prices (it depends on Russian imports for about 30% of gas consumption). Generally, risk-sensitive currencies in the G10 are also fairing badly while the yen is now doing the best and at the top of the performance table. The Russian rouble, meanwhile, has now depreciated by roughly 3.0% on the day versus the US dollar and is on course for its worst one day performance since March 2020. 

This article was originally published by the original article here.


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