Russia

US restrictions on Russian crude exports could disrupt global oil supplies and trade flows over the near term. However, they are unlikely to have a meaningful impact on crude prices over a cyclical timeframe. Stay short Brent. 

Reduce risk exposure in the very near term as President Trump's ceasefire effort falters, Russia tensions spike, and US-China trade prospects suffer.

A world of political churn favors safe havens — buy yen, stay overweight US stocks, and avoid chasing the fragile rally in China. 

Rising Russia-NATO risks, tactical oil/gold trades, tougher sanctions on Russia (maybe China), China stimulus with ~5% growth target, and US checks on Trump’s ambitions will define Q4. 

Russia’s recalcitrance will probably trigger a near-term global stock market correction by prompting larger sanctions and derailing US-China talks. But Israel’s actions do not raise our odds of a major oil shock. 

Trump, the Fed, the Russo-China bloc, Venezuela, and France are all seeing developments that imply some contrarian tactical views: Long USD, overweight US versus Europe, overweight Europe versus China, and short oil. 

The media is missing the big picture: the war is already contained. The falling oil price confirms that. We fully expect cold feet and volatility incidents in the very near term but there is only a 5% chance of Russia triggering a larger war with NATO – and that is what really matters. 

Investors should stick to a defensive stance in the very near term as the Russia-Ukraine conflict and persistent trade tensions cause market volatility.