Futures Spike After Secretary Of State Blinken Accepts Meeting With Lavrov Next Week

After a dismal day for risk which saw the S&P close down more than 2% and the Nasdaq tumble as much as 3% amid sharply heightened tensions in Ukraine where we got he-shot/she-shot reports of shelling in the Donbas regions and escalate diplomatic animosity to a fever pitch, moments ago futures jumped after State Dept. spokesperson Ned Price said  in a statement that Russia responded to a U.S. offer for meeting between Blinken and Lavrov in Europe with proposed dates for late next week, and the U.S. has accepted “provided there is no further Russian invasion of Ukraine,”

.@SecBlinken noted in his remarks at the UN Security Council earlier today that, because we believe the only responsible way to resolve this crisis is through diplomacy and dialogue, he had proposed to meet Foreign Minister Lavrov in Europe next week.

— Ned Price (@StateDeptSpox) February 18, 2022

Redundantly, Price added that “if they do invade in the coming days, it will make clear they were never serious about diplomacy.” Of course, this is trivial because if Putin really wanted to invade he would have done so by now, and as David Rosenberg also correctly notes,  Putin “knows better than blow up the Russian economy. Diplomacy will win out and he’s going to end up getting what he wants”…

If Putin really wanted to invade, he would have done it already. He knows better than blow up the Russian economy. Diplomacy will win out and he’s going to end up getting what he wants. Best not to make investment decisions around this file.#RosenbergResearch

— David Rosenberg (@EconguyRosie) February 17, 2022

… but not before a whole lot of huffing and puffing drama, so it appears that the US at least fought bravely.

In kneejerk response to the news, S&P futures jumped more than 30 points and we trading back above 4400 last…

… and the Nasdaq was up almost 1%, with safe havens like gold and Treasuries selling off, sending the 10Y yields back to 1.99%.

And now, absent some further dramatic escalations, risk will likely squeeze for the next few days until the Putin-Blinked meeting, at which point we reset and do it all over again.