It has been reported that the geopolitical risk surrounding the situation in Ukraine may escalate over the weekend. The US government has pointed out that Russia could soon invade Ukraine. It has also been reported that Americans have moved out and the embassy has moved. On the other hand, Russian Foreign Minister Sergeĭ Viklov advised President Putin that there is room for diplomatic progress, and the risk aversion movement has subsided.
I always want to calmly deal with this kind of geopolitical risk. Human minds are particularly vulnerable to life-threatening events such as conflicts and wars. If you don’t want to buy and sell in the short term, you shouldn’t be overwhelmed by the news. If you can afford it, some long-term investors may be looking for a chance of contrarian.
Currently, inflation and the central bank’s monetary policy hawkish shift as a response have become a major theme. It can be pointed out that inflation factors will intensify as geopolitical risks raise crude oil and gold prices and increase uncertainty about logistics. According to CME Fedwatch, the FOMC’s rate hike in March was temporarily reduced to about 50% due to the tightening situation in Ukraine. However, at the moment, it has risen to around 60% again.
Most recently, Interfax reported that “units in the Western and Southern Military Districts of Russia will begin returning to the base after completing the exercises on the 15th,” which is a risk-on trend for relief. However, there is a report that “Russia and Belarus will carry out live ammunition training on the 19th”, so it is assumed that there is still a possibility of ups and downs.