Morning wrap (22.02.2022)

• Putin recognized the independence of Donetsk and Luhansk republics. 

• Russian RTS plunged 13.21% yesterday amid looming risk of sanctions

• United States said that it will announce fresh sanctions on Russia together with allies

• According to media reports, Russian army has already moved into separatists' republics

• Russia plans to set up military bases in new republics and will acknowledge separatists' claims to more land 

• Ukraine says that regardless of what Russia says, it's borders are unchanged

• S&P 500 dropped 0.72%, Dow Jones moved 0.68% lower and Nasdaq declined 1.23%. 

• Asia indices also moved lower. Nikkei dropped 1.71%, S&P/ASX 200 moved 1.0% lower and Kospi dropped 1.35%. Indices from China traded 1-3% lower

• DAX futures point to a lower opening of the European trading session

• Goldman Sachs sees a possibility of a 6% drop in US stocks in case of a outright conflict in Ukraine

• According to Japanese media, Japan will join United States in chip sanctions against Russia

• Oil is adding to yesterday's gains and trades higher on the day. Brent approaches $95 area

• Precious metals trade higher. Gold trades above $1,900 while silver breaches $24 per ounce

• Cryptocurrencies are taking a hit amid increase in risk aversion. Bitcoin drops 2% and trades below $37,000

• NZD and AUD are the best performing major currencies while GBP and CHF lag the most

The Russian RTS index (RUS50) plunged 13% yesterday and reached the lowest level since November 2020. Index may experience even more weakness soon when the West announces sanctions against Russia for recognizing separatist republics. Source: xStation5