Russia-Ukraine: an uncertain outcome calls for higher focus on liquidity

At the core of the crisis, Russian assets have become almost un-investible, with dramatic price action as the market attempts to grapple with uncertainty. European equities have suffered, anticipating the negative consequences of the war on corporate earnings, while also commodities trended higher with double digit rise across many commodities. A flight to safety move has benefited government bonds, with the US treasury yield and the Bund yield trending lower.

Europe has clearly been the hardest hit by the crisis, due to its commercial ties with Russia. Moving ahead, at the heart of the European agenda will be the need to replace its oil and gas imports with new trading partners and accelerate its energetic transition toward renewables, without causing further inflationary pressures. This should reinforce the European framework.

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