 The European session saw a significant shift toward risk aversion as geopolitical tensions escalated on the 1,000th day of Russia's war in Ukraine. Investors sought refuge in major US and European treasuries, leading to a notable decline in yields. Safe-haven assets such as Gold, Swiss Franc, and Japanese Yen jumped. But the overall market response has remained relatively contained so far. In a marked escalation of the conflict, Ukraine deployed US-supplied ATACMS missiles to strike Russian territory for the first time today. This action followed approval from US President Joe Biden, granted just this week, allowing Ukraine to utilize these medium-range missiles for such attacks. Ukrainian President Volodymyr Zelenskiy addressed parliament, stating that the war's "decisive moments" are expected in the coming year. On the other hand, Russian President Vladimir Putin issued a warning by signing a revised doctrine that lowers the threshold for a nuclear strike. These developments have intensified geopolitical risks, prompting investors to adopt a cautious stance. Meanwhile, Canadian Dollar rebounded during early US session, supported by inflation data that slightly exceeded expectations. While this upside surprise is unlikely to derail the BoC from another aggressive 50bps rate cut from the current 3.75% at its December meeting, it may prompt policymakers to consider a more measured pace as interest rates approach neutral levels.... |
