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Below is the daily global market update By Team Kristal.AI

“Daily Market Update -Feb 15th- Ukraine Fears remain

Russia continues to deny it has any plans to invade as US shuts down its embassy in Kyiv after asking its citizens to leave the country. Ukraine's President seemed to confirm a similar narrative with an off hand comment about an invasion on Wednesday but the country's intelligence chief has since said there were no such events expected. Putin says Russia will continue to pursue diplomatic channels as Natural Gas prices have eased off a little from their earlier run up.

That said, Energy continues to be the best performing sector in the SPX at 23% YTD and only one of two sectors that have had positive returns YTD - the other being Financials at 1.5%. The narrative there is that a hawkish Fed raising rates will help boost net interest income. The Fed for its part seems have a wide range of views on how fast the pace of the rate rises ought to be. As has been indicated earlier, markets have significantly front run the Fed in pricing in close to 50 bps of hikes in the March meeting and four more 25 bps hikes by the end of the year (6 hikes of 25 bps each are priced in). The asset purchases are expected to stop entirely by March and for now, the existing bonds are expected to roll off the Fed's balance sheet as they mature.

As hawkish expectations continue to build, Bond ETFs have seen significant outflows in the last few weeks. Equities have been hit hard too with the SPY down about 7.5% so far this year, making it a tough environment overall. Equities globally are taking a hit too, particularly in Europe, owing to the geopolitical tensions there. Real Estate, which has historically been a better alternative in times of uncertainty has been hit by rising rates this time around, and is SPX's worst performer at -13% YTD. Crypto has provided some buffer as Bitcoin and Ethereum overcame their weakness earlier in the year to trade higher recently and Commodities also seem supported by the uncertainty for now, with Crude poised to make a run at the USD 100 level soon. Not much on the data front today as all eyes are likely to be on any headlines around the Ukraine situation.”

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