Financial market reactions to the Russian invasion of Ukraine

No 2022-032, Working Papers from Federal Reserve Bank of St. Louis

Abstract: This article analyzes financial market reactions to the Russia-Ukraine war with a focus on the opening weeks. Markets did not completely anticipate the war and asset price reactions strengthened from the first week—when there were hopes for a quick resolution—to the second week, when prices generally peaked and began to partially revert to pre-war values. Exposure to commodity trade and trade with Russia-Ukraine determined market perceptions of the riskiness of equity and foreign exchange assets. Credit default swap prices on sovereign debt and breakeven inflation rates indicate that markets saw the war as a measurable fiscal risk even for non-belligerents.

Keywords: Russia; Ukraine; commodity price; War; oil; capital controls; exchange controls; sanctions; Exchange rate; equity (search for similar items in EconPapers)
JEL-codes: F51 G15 G32 H56 Q02 (search for similar items in EconPapers)
Pages: 48 pages
Date: 2022-09-08
New Economics Papers: this item is included in nep-cis and nep-tra
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

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Journal Article: Financial Market Reactions to the Russian Invasion of Ukraine (2022)
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Persistent link: https://EconPapers.repec.org/RePEc:fip:fedlwp:94820

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DOI: 10.20955/wp.2022.032

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