Safe Haven Asset Class

 Safe Haven Asset Class

Safe Haven Asset Class.

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As the Russia-Ukraine geopolitical crisis unfolds, safe haven instruments have gained significantly as traders and investors look to safe-guard their cash. Gold has regained its glitter trading at $1,914 per ounce at the time of print.

On the breaking headline of Russia’s invasion of Ukraine, it traded above $1,970 the highest it has traded since September 2020. Oil has been an asset class that is experiencing highs of recent time due to fears of possible oil supply chain disruptions especially through the Russian supply being cut-off. The commonality has traded above $100 per barrel on Brent Crude Oil reaching highs of as much as $105 per barrel.

Russia is the Third biggest global supplier of the commodity accounting 12% to the crude oil market. What makes the current environment more complex is that Europe is among the biggest consumers of Russian oil, yet they have announced and implemented severe sanctions on Russia, a stand of solidarity against Russia’s invasion of Ukraine.

Amongst the biggest gainers, US Treasury yields have dropped on the geopolitical risk with the US 10-yr treasury trading at 1.861% at the time of print. Treasury yields and price are inversely related, a drop in yields sees an inverse increase in the Treasuries price. This is supporting the current market conditions of flight into safe haven asset class which includes the Japanese Yen and Swiss Franc.

Cryptos currency such as the popular Bitcoin seen by some as a possible store of value such as Gold (XAUUSD) have not performed as well as the precious metal. Having dropped as much as 13.41% on the day’s trading session when the invasion headline hit the press on Thurs 24th Feb. However, Bitcoin has regained much of the losses, currently up 7.39% in the current trading session.

The Euro is staging a come back against the greenback (US Dollar), EURUSD currently up 1.04% at the time of print in today’s trading session. The Euro (EUR) had suffered losses against the greenback (USD) on the invasion, however with optimism returning to the market with Russian negotiators scheduled to meet Ukraine negotiators at the border with Belarus, hopes are of the situation to deescalate.  This is the main theme currently driving much of the markets price actions. Any positive or negative headline emanating from the situation will likely be seen in the price movements across various instruments.

Disclaimer: the publication of analysis is a marketing communication and does not constitute investment advice or research. Its content represents the general views of our experts and does not consider individual readers’ personal circumstances, investment experience or current financial situation. Analysis is not prepared in accordance with legal requirements promoting independent investment research and Exness is not subject to any prohibition on dealing before the release of analysis. Readers should consider the possibility that they might incur losses. Exness is not liable for any losses incurred due to the use of analysis.

Terence Hove

Terence Hove, a Financial Markets Analyst with multi-asset brokerage firm Exness completed his BBusSci: Economics at Monash University. With over 8 year experience within financial service his expertise is well developed in financial markets analytics and trading. Exness is an industry leader that provides reliable online trading in financial markets. Exness offers professional services on the above-mentioned assets, please follow the link to learn more on the offering exness.com

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