Risk Aversion: $GOLD $BTC $WTI & $US10Y

Macro Perspectives: Mon 14 Feb 22

Risk aversion hit markets on Friday afternoon on the White House comments about the potential for a Russian invasion of Ukraine.

Without speculating on the likelihood, let's just take a look at the information to be gleaned from the market response.

First, the 10-year yield completely (and quickly) reversed the move from Thursday. So, a day after a 7.5% inflation number, and chatter of 100 basis points of rate hikes by July, global capital plowed IN to U.S. Treasuries. This signals a "flight to safety," even in the face of likely depreciation in the value of Treasuries, given the rate outlook.

Another signal of flight to safety: Gold - Gold screamed higher on the White House/Ukraine news.

What didn't perform like a safe-haven asset? Bitcoin - Bitcoin went down more than 2%.

For something thought to be supplanting gold, it didn't perform as such (at least on Friday).

With the jawboning of war, what happened to oil prices? Oil was up 4.5%. Given the global agenda to destroy fossil fuels, the underinvestment in oil exploration has led to an undersupply-meeting-pent-up-demand dynamic, which already has oil prices on path for triple-digits. Now, add in the possible effects of "wartime," and against a country that is the third largest oil producer in the world.