Magna Financial Market Report – November 20th 2024
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• Risk aversion rises after Ukraine strike.
• Markets calm as US downplays Russia.
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RECAP
Yesterday’s market movements were primarily shaped by risk aversion following Ukraine’s first attack on Russian territory using US missiles. This escalation prompted Russia to adjust its nuclear strategy, expanding its doctrine to include a potential nuclear response to any attack on its soil. The immediate market reaction was a decline in equities and risk-sensitive currencies, with investors flocking to traditional safe-haven assets like the Swiss Franc (CHF), Japanese Yen (JPY), and US Dollar (USD).
Despite the initial turmoil, markets regained composure by the end of the day. A spokesperson from the US National Security Council clarified that Russia’s decision was not unexpected, as it echoed similar rhetoric used by the country since the start of the conflict. This reassurance led to a reversal, with
safe-haven gains fading by the close of European trading.
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OUR SUMMARY
The GBP saw a rise this morning after CPI data exceeded expectations, leading to a reduction in the likelihood of a December rate cut by the Bank of England (BoE). Additionally, markets now predict a smaller total of 60 basis points in rate cuts by the end of 2025, down from earlier expectations.
Risk sentiment also showed slight improvement today, bolstered by reports from Reuters that Vladimir Putin is open to discussing a ceasefire agreement with former US President Donald
Trump.
Later today, the Eurozone will release negotiated wage data for Q3. However, given the recent trend of disinflation in the region, these numbers are unlikely to significantly affect the EUR. As always, any further developments in geopolitical tensions will remain a key focus, especially their potential impact on FX
markets.
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HOW WE CAN HELP
Our team of currency experts are here to help you get more from your money when making international payments. We will work with you to understand your payment needs and offer specialised guidance on the best options available to you. Get in touch with Osman Hanif today on +44 (0) 20 3371 9200 or email osman@magnafinancial.com.
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