While analysts speculate over a new cold war, following claims of Russian involvement in last week’s air crash in Ukraine, investors see barely an icicle forming. Monday was not a good day for shares, and the Vix volatility index rose a bit. But, with gold almost flat, and down this month, it is clear the markets are not in the grip of a new geopolitical freeze.
Rather, investors are treating the international shouting match as a little local difficulty for Russia – and barely even noticing the killings in Gaza.
Russian stocks have fallen almost a tenth in nine trading days, as the shooting down of a Malaysian passenger jet raises the prospect of tougher sanctions. As they have all year, shares are moving purely on perceptions of Russia risk, as measured by credit default swaps. Meanwhile, Israeli assets have barely moved, with equities close to record highs and the shekel staying strong.