Financial Markets React To Putin’s Latest Statements On Ukraine

Russian President Vladimir Putin on Monday called Eastern Ukraine “ancient Russian lands” and said that the region is an integral part of Russian history. Putin said that the situation in Eastern Ukraine is “critical” and talked about how modern Ukraine was created by communist Russia under Bolshevik leader Vladimir Lenin.

Earlier on the day, Putin was reportedly said to sign a decree recognize the breakaway regions of Eastern Ukraine, Donetsk and Luhansk, as independent nations.

The Kremlin announced on Monday that Putin had informed the President of France and Chancellor of Germany of his decision shortly before the Kremlin made it official and they were reportedly “dismayed”. France has subsequently called for a UN security council meeting on the Ukraine crisis, reported French press.

As for markets’ reaction, financial markets saw a risk-off reaction to confirmation that Russia will recognize the breakaway regions of Ukraine as independent as this is deemed as a big escalation that makes a military confrontation between Ukraine and Russia invasion significantly more likely.

In the currencies markets, safe-haven currencies including USD and others have been gaining in recent trade while risk-sensitive currencies have been taking a hit.

US equity futures continue to press to fresh lows of the day, with S&P 500 futures now down about 1.3% and underneath the 4300 level.

Oil prices have been on the front foot with WTI rallying into the mid-$93.00s from as low as the mid-$92.00s just a few minutes ago.