What’s the basket of trades around war in Ukraine?

More reports on the details of Biden’s call with world leaders are leaking and it appears he did tell them that he believes Putin has given the order to invade.

The yen is edging back to the highs of the day and stocks are at fresh lows with the S&P 500 down 90 points to 4414. Oil is also edging higher and gold retains a strong bid.

If nothing else, I think we’re getting a good idea of what the ‘war trades’ are.

Buy:

• Yen
• Oil
• Gold
• Bonds
• Wheat

Sell:

• Stocks, especially consumer discretionary and tech
• Ruble
• AUD

Obviously it’s the reverse if there is a de-escalation.

I think some of those could reverse in time and how oil reacts later will depend on whether or not there are sanctions on Russian oil and gas. Earlier this week, there was a report in the FT that leaders had agreed on ‘dynamic’ sanctions that could escalate so I’m inclined to believe the first announced sanctions will be lighter than feared. That could hurt oil.

Crypto is an interesting one. It has recently traded like a levered trade on tech. Bitcoin is down today on this war talk so that’s the indication but it’s worth watching closely.