Comments on Ukraine

25 Feb 2022

With this week’s events in the Ukraine, geopolitical risk has increased and markets have reacted accordingly. Equity sell offs are not unexpected and are currently at the indiscriminate stage. 

Direct client exposure to Russian equities is de minimis. However, the effect of the invasion is felt across multiple asset classes. Equities have sold off, with developed market government bonds witnessing spread tightening as demand for safe assets rises. Commodities, particularly oil, have seen further sharp rises. The latter will pour more fuel on the inflation fire. Gas supplies from Russia to Europe are under threat, but Russia does need the revenues.