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Oil prices have been somewhat insulated by the growing tension between Russia and Ukraine. However, natural gas prices have been more sensitive to these developments, while gold, as one would expect, has benefitted from safe-haven demand.

The prospect of an escalation in Ukraine has led to a higher demand for Bunds, bringing the Bund swap spread close to zero. However, the underlying factors that caused the Bund swap spread to turn negative are still present, as shown by similar trends in the USD/EUR cross-currency basis.

The escalation in the Russia-Ukraine conflict had only a short-lived impact on FX, and safe-haven demand has rapidly faded.

Brent settled flat yesterday despite rising tension between Russia and Ukraine. Developments related to Iran’s nuclear program likely countered some of the geopolitical risk.

Markets are consolidating after a period of heightened volatility. In focus currently is President-elect Trump’s pick for the influential post of US Treasury Secretary. Given the large US budget deficit, investors will probably want to see a safe pair of hands being chosen.

Oil prices increased yesterday due to supply outages and a weaker USD. Meanwhile, despite Gazprom halting supply to OMV, Russian pipeline gas continues to flow into Europe as usual.

After elevated inflation prints and mildly hawkish commentary from Fed Chair Powell this week, a set of decent retail sales numbers, but admittedly mixed manufacturing numbers leaves the prospect of a December Fed rate cut firmly in the balance.

‘Schuldenbremse’ is currently the most known German word in financial markets. It contributed to the collapse of the government and will be a key element in any next government’s plans to overhaul and modernise the economy.

Banks are expected to reduce their issuance in sustainable format next year against the backdrop of overall lower issuance volumes.