Asian markets on Monday kick off what looks like a pretty light week for regional economic, policy and corporate drivers, with all eyes on how investors react to the extraordinary events in Russia over the weekend.
It is unclear what the immediate impact of Russian mercenaries’ advance on Moscow, retreat and apparent deal with President Vladimir Putin will be on risk appetite and demand for traditional ‘safe haven’ assets like gold, Treasuries, the Japanese yen or the U.S. dollar.
These assets would likely have attracted strong investor demand first thing on Monday morning had the Wagner group’s march on Moscow continued. The apparent truce, however, makes that less certain, although the situation remains fluid and huge uncertainty surrounding Putin’s grip on power remains.
U.S. Secretary of State Antony Blinken suggested the turmoil in Russia might not be over and could take months to play out, while China’s foreign ministry said on Sunday that Beijing supports Russia in maintaining its national stability
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U.S.-Sino relations were already rock bottom so differences over the crisis in Russia will come as no surprise, but could serve as a reminder of the geopolitical risks that hang over global markets.
Investors may be inclined to hunker down for the time being given the broader ‘risk off’ sentiment that descended on markets on Friday.
