2023-06-25 12:09:35
The Wagner founder’s coup once morest Russian President Putin
Russia and Putin
Expert: Expectations of investors heading to safe havens
Dubai – Al Arabiya.net
Posted on: June 25, 2023: 02:37 PM GST Last updated: June 25, 2023: 04:09 PM GST
Investors are awaiting the latest developments in Russia, as some of them are expected to turn to safe havens such as US government bonds and the dollar.
The Wagner Group, led by Yevgeny Prigozhin, a former ally of President Vladimir Putin and founder of the Wagner Army, launched a counter-operation once morest the Russian army, advancing most of the way to Moscow following capturing Rostov.
After the Kremlin announced that the criminal case once morest Prigozhin would be dropped and he would leave Russian territory for Belarus, Wagner fighters began, on Saturday, their withdrawal from the military headquarters in Rostov.
On the other hand, the Kremlin confirmed that the rebellion carried out by the “Wagner” group would not affect the Russian military offensive in Ukraine, where the Russian-Ukrainian fronts are witnessing fierce battles between the two sides today, Sunday.
Markets have witnessed significant fluctuations since the start of the Russian-Ukrainian war in February 2022.
After Saturday’s events, some investors said they were focusing on the potential impact on safe-haven assets such as US Treasury bonds and commodity prices, especially since Russia is a major energy supplier.
In this context, Gennady Goldberg, head of market strategy at TD Securities New York, said: “We will certainly see what happens in the next couple of days, but if the uncertainty regarding the leadership in Russia persists, investors may flock to safe havens.” “.
Goldberg said that despite the de-escalation, “investors may still be concerned regarding subsequent instability, and they can remain cautious.”
Events in Russia have revived old fears in Washington regarding what happens to Russia’s nuclear stockpile in the event of domestic unrest.
“Markets usually don’t respond well to uncertainty,” said Quincy Crosby, chief global strategist at LPL Financial.
“If uncertainty escalates, we will see more bids on Treasuries and gold, and the Japanese yen also tends to gain in such circumstances,” he said, referring to the safe-haven asset that investors turn to when risks rise.
Global investment strategist at Argyll Europe said that while de-escalation means markets may not react as much now, Putin is clearly weak and there will be more developments.
He believes that the US dollar finds “some support as the market returns to speculation regarding interest rate hikes, cuts and the possibility of recession in various economies.”
Stocks have been on an upward trajectory in recent months, which has increased the potential for higher selling and profit-taking over the past weeks.
Since the beginning of the year, the S&P 500 has gained 13%, although it has lost steam in recent days following Federal Reserve Chairman Jerome Powell testified last week that suggested more interest rate hikes are likely to come.
And if the crisis worsens in Russia and also in Ukraine, this may mean that commodity prices will go back up, and therefore the Fed and other central banks may have to raise interest rates to control the rise in prices resulting from the state of uncertainty.
Until now, some analysts believe that there has not been a strong reaction due to the return of calm to the political scene in Russia.
According to the Colony Group’s chief market strategist Rich Steinberg, the markets will take what happened as another geopolitical risk and short-term tensions have decreased due to the de-escalation.
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