Market focus will move to the scope of sanctions on Russia

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Here’s an interesting sign of the shifting narrative.

Czech President MiloŇ° Zeman — who is considered a long-time ally of Putin — totally changed his tune today.

“A few days ago, I said that the Russians are not crazy and that they will not attack Ukraine. I admit I was wrong. (…) It is necessary to isolate the madman,” he says now. He called for cutting off Russia from SWIFT, which is the toughest sanction.

European leaders had ruled out SWIFT and oil & gas. Some of that has already been repeated today but bombs falling certainly changes the equation.

At the same time, risks slowly become two-way. WTI crude oil is up $6.47 to $98.57 and a geopolitical premium was already built in before today. If sanctions don’t come, that can reverse.

On the EU side, Von Der Leyen says:

  • Sanctions will seriously degrade the Russian economy
  • We want to cut Russian industry from tech needed today to build the future
  • Sanctions will suppress Russia economic growth

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