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Fears of a Russian invasion of Ukraine are on the rise, prompting analysts and traders to weigh the potential financial-market shock waves.
“If Russia invades Ukraine, the trade is buy TY,” wrote Brent Donnelly, president of Spectra Markets, in a Friday note, referring to 10-year Treasury-note futures TY00 .
Treasurys are a traditional haven during periods of geopolitical and economic stress. A rally in Treasurys would pull down yields, which move in the opposite direction of prices. A Treasury selloff has pushed up yields, with the 10-year Treasury rate TMUBMUSD10Y finishing near 1.77% Friday after hitting a nearly two-year high earlier in the week.
The Swiss franc, another popular haven, could also rally, with the euro/Swiss franc EURCHF currency pair likely to fall to CHF1.03 “on a frozen rope if Russia moves,” Donnelly said. The euro bought 1.043 francs Friday.
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