OPINION
Market Rating Before FOMC MeetingJan 31
Putin Declares Partial Mobilization; How Will Markets React?
Markets welcomed the new trading day with relatively high investor stress, with the declaration of mobilization from Russia.
It has been spoken for a while that the Russian side will make a new move, with Ukraine gaining dominance in some of the seized regions. As a matter of fact, Russian President Vladimir Putin announced that he declared a partial mobilization in his country, emphasizing that the West wants to destroy Russia and that all necessary steps will be taken to protect Russia's sovereignty.
Expressing that the West's aggression against Russia has gone beyond all borders, with the words "The West is blackmailing us with nuclear weapons," Putin conveyed that Russia has many weapons to respond to this, and called on the government to provide funds to increase the production of weapons. Putin added that the objectives of the military operation have not changed.
Russian Defense Minister Sergei Shoigu, on the other hand, stated that his country is at war with the West in Ukraine, and said that partial mobilization will not be a one-off, but will be implemented gradually.
One step behind: Following Ukraine's retake of important lands captured by Russia, a referendum was held on September 23-27 in the regions of Donetsk, Luhansk, Kherson, and Zaporizhia under the control of pro-Russian separatists, in order to be connected to Russia.
On the subject, of the Western block, firstly, German Chancellor Olaf Scholz said the decision was a clear violation of international law and was unacceptable. British Foreign Secretary Gillian Keegan also argued that Putin's threats should be taken seriously.
The reflection of the declaration of mobilization in international markets was seen in the investor risk atmosphere. The VIX index, the indicator of global risk appetite, rose to the highest level of 2.5 months with 28 points. Pressure on investor behavior is also observed in European markets; VSTOXX: 28.65.
As a result of the demand for a safe harbor from this point of view, the dollar index renewed its 20-year high with 110.58, while the ounce of gold, the leader of the precious metals group, rose to the level of 1676 dollars after closing from 1664 yesterday. Especially with the supply concerns triggered by the declaration of mobilization, crude oil recovered to the level of $86.53 with a daily gain of almost %3.
However, it is too early to say that there has been a trend change in ounce gold and oil prices due to the stress level in the markets. In this regard, it should be noted that the monetary policy announcement to be announced by the Federal Open Market Committee (FOMC) today is still the basic pricing state of affairs. The 75 basis point monetary tightening expected from the FOMC is a strong obstacle to the commodity market at this point. However, it will be watched whether the change in the degree of tension on the West-Russia line can overshadow the FOMC decision.
It has been spoken for a while that the Russian side will make a new move, with Ukraine gaining dominance in some of the seized regions. As a matter of fact, Russian President Vladimir Putin announced that he declared a partial mobilization in his country, emphasizing that the West wants to destroy Russia and that all necessary steps will be taken to protect Russia's sovereignty.
Expressing that the West's aggression against Russia has gone beyond all borders, with the words "The West is blackmailing us with nuclear weapons," Putin conveyed that Russia has many weapons to respond to this, and called on the government to provide funds to increase the production of weapons. Putin added that the objectives of the military operation have not changed.
Russian Defense Minister Sergei Shoigu, on the other hand, stated that his country is at war with the West in Ukraine, and said that partial mobilization will not be a one-off, but will be implemented gradually.
One step behind: Following Ukraine's retake of important lands captured by Russia, a referendum was held on September 23-27 in the regions of Donetsk, Luhansk, Kherson, and Zaporizhia under the control of pro-Russian separatists, in order to be connected to Russia.
On the subject, of the Western block, firstly, German Chancellor Olaf Scholz said the decision was a clear violation of international law and was unacceptable. British Foreign Secretary Gillian Keegan also argued that Putin's threats should be taken seriously.
The reflection of the declaration of mobilization in international markets was seen in the investor risk atmosphere. The VIX index, the indicator of global risk appetite, rose to the highest level of 2.5 months with 28 points. Pressure on investor behavior is also observed in European markets; VSTOXX: 28.65.
As a result of the demand for a safe harbor from this point of view, the dollar index renewed its 20-year high with 110.58, while the ounce of gold, the leader of the precious metals group, rose to the level of 1676 dollars after closing from 1664 yesterday. Especially with the supply concerns triggered by the declaration of mobilization, crude oil recovered to the level of $86.53 with a daily gain of almost %3.
However, it is too early to say that there has been a trend change in ounce gold and oil prices due to the stress level in the markets. In this regard, it should be noted that the monetary policy announcement to be announced by the Federal Open Market Committee (FOMC) today is still the basic pricing state of affairs. The 75 basis point monetary tightening expected from the FOMC is a strong obstacle to the commodity market at this point. However, it will be watched whether the change in the degree of tension on the West-Russia line can overshadow the FOMC decision.
