War Risk Growing. We Forecast the Market Impact
- Clifford Bennett, Chief Economist | World’s most accurate currency forecaster at ACY Securities
- 20.01.2022 09:45 am #stocks
Russia Risk is accelerating.
Source: abcnews.go.com
Good morning,
It is alarmingly possible that Russia could move deeper into Ukraine at any moment.
Igniting all out war.
The risk continues to climb toward probable, rather than just possible.
I previously commented that the West has assured Russia it will not act militarily. I remain concerned that an economic deterrent may be seen in Moscow as a mere price to pay to take Ukraine.
Should Russia move on Ukraine it will be a violent military conflict. The risk level is growing. Not sure that it is probable as yet, but the possibility index is way up.
Stocks would crash. There are on-going high level US Russian conversations continuing. I think the next few days could be a temporal focal point for both the risk of war and the stock market.
Markets would crash not just because of the military conflict on the ground, but due of the widespread economic disruption across Europe resulting from the imposition of severe sanctions against Russia.
Even though he has said he will not use gas supply as a weapon, President Putin may allow the price to rise yet again significantly. Another economic slow-down in Europe would follow.
Russians are tough. They are prepared to pay an economic price for national pride and expansion back into what use to be part of the USSR. Hopefully, this does not happen, but the risk is rising fast these next few days to a week.
Global markets impact: I think Russia Ukraine War would generate higher Oil, well above $100; higher Gold through $2,000; and a higher US dollar, to EUR 1.07/1.05, even parity.
This is immediately very interesting:
Some of the movements we would expect from a war are already occurring. Stocks are down and looking very heavy. The US dollar has already been firming. Gold just jumped. As did Oil.
Conclusion: Some people are already hedging against war.
Overall and in any case, both US and Australian stock markets look ready to decline further and perhaps sharply so. My Australian dollar target for this year remains 68 cents.
From yesterday afternoon,
Even has jokes.
The Quick Story.
Have a great afternoon!
Clifford Bennett
ACY Securities Chief Economist.
The view expressed within this document are solely that of Clifford Bennett’s and do not represent the views of ACY Securities.
All commentary is on the record and may be quoted without further permission required from ACY Securities or Clifford Bennett.
This content may have been written by a third party. ACY makes no representation or warranty and assumes no liability as to the accuracy or completeness of the information provided, nor any loss arising from any investment based on a recommendation, forecast or other information supplied by any third-party. This content is information only, and does not constitute financial, investment or other advice on which you can rely.
