Global financial markets experienced significant fluctuations following the latest developments in the Russia-Ukraine conflict. According to Bloomberg, global equities dropped sharply after Ukraine launched its first attack using U.S.-supplied missiles deep into Russian territory. In response, Russian President Vladimir Putin signed a decree updating the country’s nuclear doctrine, expanding the conditions for the use of nuclear weapons.
Meanwhile, U.S. officials stated they have no plans to respond to Russia’s revised nuclear policy, maintaining a measured stance in the escalating tensions.
Safe-Haven Assets Gain Momentum
As uncertainty loomed, investors turned to safer assets. Long-term U.S. Treasury bonds outperformed major currencies, while traditional safe-haven currencies like the Japanese yen and Swiss franc saw substantial gains. Key highlights include:
- Gold prices rose 0.9%, trading at $2,635 per ounce—a near-record high as demand surged.
- The Japanese yen appreciated 0.8% against the U.S. dollar, reflecting growing demand for stability.
- The Swiss franc reached its strongest level against the euro since August, signaling heightened investor caution.
U.S. Markets Struggle Amid Rising Uncertainty
In the U.S., stock futures pointed to a negative opening, with the S&P 500 futures declining by 0.5%. Treasury yields also reacted to the geopolitical tensions, with 10-year yields dropping by seven basis points as investors flocked to government bonds.
Russia’s Updated Nuclear Doctrine
President Putin’s updated nuclear doctrine aims to address evolving geopolitical realities. The decree, signed on November 19, outlines an expanded framework for nuclear deterrence, emphasizing the need to adapt to current political and military challenges.
This development comes shortly after reports that U.S. President Joe Biden authorized Ukraine to utilize long-range ATACMS missiles, enabling strikes deeper within Russian territory. The Kremlin justified the policy shift, stating that the revision aligns Russia’s nuclear strategy with the present global situation.
Market Outlook
Geopolitical risks are expected to dominate market sentiment in the near term. Investors are likely to remain cautious, favoring safe-haven assets and defensive strategies. Analysts suggest monitoring the situation closely as further developments could lead to increased market volatility.