CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 69% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 69% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.

Shelling at nuclear plant in Ukraine jolts markets

Article By: ,  Market Analyst

Not satisfied with shelling Chernobyl – the infamous location of a previous nuclear plant disaster - Russia’s military have seemingly turned their attention to Europe’s largest nuclear plant in Zaporizhzhya, Ukraine. Reports of a fire and images of an explosion at the facility have surfaced, just hours after a temporary ceasefire was agreed to pave way for a ‘humanitarian corridor’. And the culprit is alleged to be the Russian shelling of the nuclear facility.

Radiation within normal limits (for now)

The Ukrainian State Emergency Service has since reported that radiation levels sit “within normal limits” but there is currently little information about how devastating the impact may be. A major concern is that the current fire, or further attacks at the facility, could hinder the ability to keep the nuclear reactor cool enough for the core not to explode. Should such an event occur, it would be much larger than the crisis in Chernobyl, an area will not be safe for thousands of years. And this would become a global issue.

The collateral damage may not be limited to Ukraine

With Russia bombing the Chernobyl site and now targeting live nuclear stations, there’s plenty of room for collateral damage. And not just for Ukraine but surrounding countries. So we have to ask ourselves, at what point is this simply an invasion on Ukraine? With air being shared globally shared commodity and a nuclear power plant meltdown a sure way of contaminating it for all.

Flight to safety favours the yen and gold

The flight to safety has also taken its toll on emerging FX, with the Thai baht down -0.4% and South African rand off around -0.5%. Indices across Asia are in the red, with the Nikkei down around -2% and the Hang Seng sitting at a post-pandemic low (it has not traded at this level since March 2020). Investors are moving away from riskier assets such as emerging FX, and seeking safety in the yen. Oil has spiked and global yields have also taken a knock. The fact we’ve seen these moves across the major asset classes - both simultaneously and during the Asian session - is very telling. The world is watching to see if things escalate. And this will likely be a key theme heading into the European and US session, to see how world leaders respond.

 

How to start gold trading

 

Reports of the fire initially saw the euro weaken and create a flight to safety into the yen and gold, although prices have since pulled back on reports that shelling had stopped and the site is now secure. However, we saw from last week’s COT report that investors were continuing to pile into gold, and two fruitless peace talks and a shelled nuclear site later, we see little reason for investors to step away from gold just now. Technically, gold remains in the 1916 – 1950 range, although three higher lows have formed above 1916, and we have now seen an attempted break above 1950 overnight.

 

How to trade with City Index

You can easily trade with City Index by using these four easy steps:

  1. Open an account, or log in if you’re already a customer 

    Open an account in the UK
    Open an account in Australia
    Open an account in Singapore

  2. Search for the company you want to trade in our award-winning platform 
  3. Choose your position and size, and your stop and limit levels 
  4. Place the trade

 

StoneX Financial Ltd (trading as “City Index”) is an execution-only service provider. This material, whether or not it states any opinions, is for general information purposes only and it does not take into account your personal circumstances or objectives. This material has been prepared using the thoughts and opinions of the author and these may change. However, City Index does not plan to provide further updates to any material once published and it is not under any obligation to keep this material up to date. This material is short term in nature and may only relate to facts and circumstances existing at a specific time or day. Nothing in this material is (or should be considered to be) financial, investment, legal, tax or other advice and no reliance should be placed on it.

No opinion given in this material constitutes a recommendation by City Index or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although City Index is not specifically prevented from dealing before providing this material, City Index does not seek to take advantage of the material prior to its dissemination. This material is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.

For further details see our full non-independent research disclaimer and quarterly summary.

CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 69% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money. CFD and Forex Trading are leveraged products and your capital is at risk. They may not be suitable for everyone. Please ensure you fully understand the risks involved by reading our full risk warning.

City Index is a trading name of StoneX Financial Ltd. Head and Registered Office: 1st Floor, Moor House, 120 London Wall, London, EC2Y 5ET. StoneX Financial Ltd is a company registered in England and Wales, number: 05616586. Authorised and regulated by the Financial Conduct Authority. FCA Register Number: 446717.

City Index is a trademark of StoneX Financial Ltd.

The information on this website is not targeted at the general public of any particular country. It is not intended for distribution to residents in any country where such distribution or use would contravene any local law or regulatory requirement.

© City Index 2024