Russian forces fired missiles at Ukrainian cities and landed troops on its coast on Thursday, after President Vladimir Putin authorised what he called a special military operation in the east.
Here are the reactions of a range of top analysts and economists in response to unfolding events inside Ukraine and on their possible economic implications.
WU QIANG, INDEPENDENT POLITICAL ANALYST, BEIJING
“This is a very unfavourable situation that an unprepared China has been pulled into by Russia.”
“It is possible that China may lose its existing relationship with Europe, a friendly relationship, and that China and the United States may soon fall into a confrontation because of a quasi-alliance between China and Russia. And so far, China has not shown a great willingness to stop the war.”
VASU MENON, EXECUTIVE DIRECTOR OF INVESTMENT STRATEGY, OCBC, SINGAPORE
“History shows that military attacks like this and geopolitical events will pass eventually if there is no major global economic impact. If this is so, markets will rebound after an initial sharp drawdown. Those looking to buy on dips should buy gradually and must take a medium to long term view.”
YUAN YUWEI, PARTNER, WATER WISDOM ASSET MANAGEMENT, HANGZHOU
“The simple strategy is to bet on a spike in inflation. That means buying oil and agricultural products, and shorting consumer shares and US growth stocks.
“China will likely boost support to sectors, such as agriculture, semiconductors and new energy.”
Read more:
Stocks Dive, Oil Soars as Russia Launches Invasion of Ukraine
Asian Stocks Sink, Oil And Gold Surge As Ukraine Invaded
KYLE RODDA, MARKET ANALYST, IG AUSTRALIA, MELBOURNE
“This is very good for gold, very positive for commodities broadly, especially oil. And stocks are going to keep falling in this environment because it’s very difficult to price these outcomes.”
ROBERT RENNIE, HEAD OF FINANCIAL MARKET STRATEGY, WESTPAC, SYDNEY
“Oil inventories are already staggeringly low and Russia is such a major producer any sanctions that threaten supply would be hugely damaging. From an FX perspective, why the euro isn’t a lot lower is a mystery. It should be.”
DAN WANG, CHIEF ECONOMIST, HANG SENG BANK (CHINA), SHANGHAI
“A war will trigger a food and energy crisis. Emerging-market countries, especially Turkey, Egypt and Lebanon, are highly dependent on wheat produced in Russia and Ukraine. These countries are fighting high inflation…
“But the war has limited impact on global trade, because apart from oil and natural gas, Russia doesn’t have supply chains that can impact the world, which is different from China.”
TAKAHIDE KIUCHI, EXECUTIVE ECONOMIST, NOMURA RESEARCH INSTITUTE, TOKYO
“Russia taking control of Ukraine would set a bad precedent, sending worrying signals to geopolitical flashpoints such as Taiwan and the South and East China Seas.”
CRISTIAN MAGGIO, HEAD OF STRATEGY AT TD SECURITIES, LONDON:
“Currencies that will underperform the most are the most volatile – the Russian rouble and the Turkish lira…
“For the rouble – and not to mention the Ukrainian currency – the other risk is that liquidity simply drags out. Investors will not want to be involved at all.
“What’s going to happen, only Putin knows. As usual, Russian sources denied any intention to be militarily involved in Ukraine – and here we are, in the largest scale military operation in Europe since World War Two. Anything can happen from here.
“The safe-haven bid is exactly what is happening.”
GEORGE KANAAN, HEAD OF CASH EQUITIES, BARRENJOEY CAPITAL, SYDNEY
“The market has been looking for an excuse to sell off and now they have a real one… They flick the switch when there is uncertainty like this and buyers go on strike.”
CHRIS WESTON, HEAD OF RESEARCH, PEPPERSTONE, MELBOURNE
“There are no buyers here for risk, and there are a lot of sellers out there, so this market is getting hit very hard.”
JUSTIN ONUEKWUSI, PORTFOLIO MANAGER AT LEGAL & GENERAL INVESTMENT MANAGEMENT, LONDON
“This puts central banks in a really tricky situation. A March hike from the Fed is being priced out [and] the number of Fed hikes this year being lowered because …it feels like it’s the wrong time to start taking liquidity out of markets.
“Central banks may have to look through an inflation spike though that means ultimately rate hikes could become substantially bigger. I’d say medium term inflation risks have increased substantially…
“Our view was 25 bps hike in the US in March and the probability of that is definitely lower.”
FREDERIK DUCROZET, STRATEGIST AT PICTET
“[This] will make the ECB more cautious and may delay the decision on tapering bond purchases.”
KEITH TEMPERTON, SALES TRADER AT FORTE SECURITIES
“There’s no denying that it puts pressure on supply chains and the likes of the German industrial complex for their energy needs.
“We haven’t seen such a confluence of factors like sky-rocketing commodity prices and potential stagflationary scenarios. It’s the worst possible recipe for stocks.”
GULDEM ATABAY, ANALYST WITH ISTANBUL ANALYTICS
“Turkey potentially will be impacted most by the rise in energy prices… Sanctions are not expected to be announced for now but Turkey needs to abide by NATO’s steps.”
- Reuters with additional editing by Sean O’Meara
Also on AF:
Japan, Australia to Tap Oil Reserves if Ukraine Conflict Worsens
Pakistan PM Seeks Russian Gas Amid Ukraine Invasion
