- Market sentiment soured after Russia started shelling Europe’s biggest nuclear power plant.
- S&P 500 Futures, US 10-year T-bond yields renew intraday low on fresh risk-aversion.
- The news reverses hopes of ceasefire and propels rush to risk-safety.
- Fed-linked chatters highlight US NFP as another important catalyst.
Risk-aversion gained full steam as the Russian military attacked Ukraine nuclear plant on early Friday in Asia.
While portraying the mood, S&P 500 Futures drop around 0.80% on a day to 4,324 whereas the US 10-year Treasury yields mark near 12 pips of a downside to 1.72% by the press time.
Following the Associated Press (AP) news that Russia's military has started shelling Europe's largest nuclear power plant, Ukrainian Foreign Minister Kuleba confirmed the fire at the plant. The diplomat also said, “Fire has already erupted. if it explodes, it will be ten times the size of Chernobyl.”
The risk-aversion wave helped the US Dollar Index (DXY) to stay firmer around the 2022 high while prices of gold also renewed weekly top following the news.
The news confirms the market’s doubt over the Russia-Ukraine peace talks that agreed on the safe passage of Kyiv’s civilians the previous day.
Also weighing on the sentiment could be chattering over a 0.50% rate hike by the Fed in the March meeting. On Thursday, US ISM Services PMI eased for the third consecutive month in its latest release but the second-tier job data and Factory Orders came in positive. The same might have pushed Fed Chair Jerome Powell to reiterate his support for a 0.25% rate hike, actually showing readiness for a 0.50% rate-lift in the March meeting, which in turn favored the US Dollar Index (DXY), during the second round of testimony.
Looking forward, the fresh risk-off mood is likely to keep the reins and may weigh on the riskier assets but the pre-NFP sentiment may test the bears.
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