note: Bumped up from earlier this morning.
The latest scenario is that the U.S. is goading the Ukrainians to take a tougher line on the Russian-speaking eastern territories of Donetsk and Luhansk to force a response from Moscow:
(ABC.au)
That may be what happened this morning.
Ukrainian armed forces release statement on that kindergarten shelling in eastern Ukraine, claiming the shelling was done by pro-Russian forceshttps://t.co/HJ1eyBcd3H
— Steve Lookner (@lookner) February 17, 2022
(h/t @factal) pic.twitter.com/VjSOV9mKck
Or it may be that the Russian-backed separatists decided to lob an artillery round into a kindergarten while children were present.
It's tough to tell, we are in real fog-of-war territory here.
From Marc to Market, February 17:
Overview: US intelligence claims that Russia is still mobilizing for an attack on Ukraine is sapping risk appetites and lifting gold to its highest level since last June around $1885-$1890. Asia Pacific equities advanced, except in Japan. Europe's Stoxx 600 is nursing a small loss, while US futures are off around 0.4%-0.6%. The 10-year US Treasury yield is hovering slightly above 2.0%. European benchmark yields are 2-4 bp lower. The Scandis and euro are bearing the brunt of the risk-off move among the major currencies, while the Antipodeans, yen, Swiss franc, and sterling have pushed higher. Emerging market currencies are mostly lower, led by Russia and central European currencies, but the JP Morgan Emerging Market Currency is edging higher for the fourth consecutive session, recovering from earlier weakness. Hungary left its one-week repo rate steady at 4.3% and Turkey is expected to also stand pat (14%). April WTI is retracing most of yesterday's 1.8% gain and is straddling $90 a barrel. US natural gas is falling for the first time this week. Europe's benchmark is up about 10% since Tuesday's 16% slide. Iron ore slumped 7% after it rose 3.2% yesterday. Copper is slipping for the first session in four.
Asia Pacific
Japan reported weaker than expected exports and stronger than expected imports drove the trade deficit to JPY2.19 trillion. It was a third larger than expected. Seasonally, Japan's January trade balance always (20-years-plus) deteriorated from December. Yet, there is something more going on. Rising energy and commodity prices more generally are deteriorating Japan's terms of trade. It shares that with the eurozone that reported its largest trade deficit in 13 years earlier this week. EMU's trade balance also typically deteriorates in January from December, but surge in energy prices appears to have aggravated the seasonal pattern. Meanwhile, nearly every day that passes now means that a significant disruption of Russia's gas supplies could have a diminishing impact on Europe as spring approaches.
Australia's jobs market held up better than expected last month. It created almost 18k jobs. The market expected a flat report. The positions created were all part-time posts, while full-time positions fell by 17k after increasing 41k in December. Australia grew an average of almost 3 full-time jobs last year after losing a little more than 8k a month in 2020. While the unemployment rate was steady at 4.2%, the participation rate ticked up to 66.2% from 66.1%. The virus (sick-leave) and extended time-off (vacations) saw the hours worked fall 8.8% month-over-month. Australia's employment report is unlikely to impact expectations. The market continues to price in the first hike around mid-year. Rather than ratify market expectations, the central bank continues to pushback....
....MUCH MORE
