We wrote recently about how the residual risk that remained priced within (FX) markets was increasingly being removed from positioning data. Despite broad doubts about the credibility of claims of progress in Russia-Ukraine peace talks, the market scaled back demand for safe-haven FX, finding comfort in more moderate wholesale energy prices and macroeconomic conditions. More recently, the fact that Russia appears to have distanced itself from demands for settlement in Ruble for energy exports has continued to support risk conditions.
When highlighting the more balanced positioning in markets and more sanguine outlook we also stressed the propensity for complacency to feed into price action. Given that the market had largely discounted the risks of the conflict in Ukraine focussing instead on growth prospects and respective monetary policy outlooks, headlines emanating from the invasion once again hold the power to catch the market off guard.
One such headline and topic that holds the propensity to change the market’s relative calm surrounding the conflict in Ukraine is claims of war crimes. War crimes create and demand huge attention on the international stage. They are therefore significant and powerful catalysts of sanctions which have been a stronger driver of rates within currency markets, far more so than death tolls and geographical advance.
Via its significance to the global political economy and sanctions in turn, the claims and trials against war crimes allegedly committed could therefore reintroduce defensive demand within markets. Alongside technical resistance and price dynamics driven by the development of interest rate differentials, these allegations have undeniably contributed to EURUSD’s sell-off in the past three trading sessions.
Discussion and Analysis by Charles Porter
Click Here to Subscribe to the SGM-FX Newsletter
Related Insights
Daily Brief – Delayed fuse
Charles Porter
Thu 30 Apr 2026
Delayed fuse Last night’s Federal Reserve decision held all the potential requirements for a momentous occasion. Markets had been ascribing a high value to the event with options pricing suggesting the decision posed a significant risk towards exposed assets. Ultimately, the potential swan song publication of Chair Jay Powell passed without incident. Claims from some […]
Daily Brief – Cancelled Travel Plans
Charles Porter
Thu 23 Apr 2026
Cancelled Travel Plans No, this time not because of the impending jet fuel crisis threatening continental travel as we discussed yesterday. Instead, I’m referring to the grounding of Vice President Vance whose trip to Islamabad, Pakistan was cancelled on Tuesday to avoid embarrassment. The Vice President was expected to travel on Tuesday to resume talks […]
Daily Brief – Sterling defence
Charles Porter
Tue 28 Apr 2026
Sterling defence Options markets are flashing warning signals for Sterling. It’s no secret that the forthcoming Bank of England monetary policy decision later this week poses a risk for the Pound. However, there are risks mounting further afield. The local elections on May 7th are a material risk for GBP, for example, with traders concerned the […]
