Dhara Ranasinghe shows us the market day ahead.

The world markets have now recovered some of the worst losses from Russia’s aggression on Ukraine, but investors are still seeing this as a tail risk event.

After the United States announced new sanctions against Russia, Asian stock markets recovered and European futures rose sharply.

It’s now a matter of waiting and seeing what the next days bring, for many investors. This includes the level of sanctions, the location of energy prices and how central bank react.

Inflation is at an all-time high. This has been confirmed by comments made in the past 24 hours.

Christopher Waller, Fed Governor, presented the argument for increasing U.S. rates one percentage point per week by mid-summer.

Officials from the European Central Bank have indicated that the invasion does not fundamentally alter the economic outlook.

It is possible to be cautious despite the uncertainty.

Markets have seen the most aggressive rate-hike bets lowered, which has lifted sovereign bond markets.

But, oil prices are likely to rise in near term due to the surge of $100/barrel after the invasion.

European stocks rose more than 60% on Thursday, before closing just above 30%.

Russia’s ruble, which suffered a severe beating Thursday, was 0.7% more strong against the dollar in early London trade at 84.72.

Russia has built up financial protections over the last seven years, but its economy won’t be strong enough to resist the coordinated West sanctions.

Markets should be more informed by Friday’s key developments

Companies close Ukraine operations and assess the impact of Russian sanctions

-ECB President Christine Lagarde speaks

– Euro zone finance ministers meet

– German detailed Q4 GDP

GfK: UK’s confidence drops the most since pandemic.

US core PCE index/durable good/final University of Michigan inflation forecasts

Earnings in the USA: Footlocker and Sempra

European earnings: Evraz (LON), Pearson, Amadeus (BASF), IAG (LON), Rightmove, Rightmove, SEB, Swiss Re, (OTC): Holcim (SIX) Jupiter

– Emerging market central banks: Colombia

(Graphic: The impact of tensions over Ukraine, https://fingfx.thomsonreuters.com/gfx/mkt/zjvqkojlavx/Russia2402.PNG)