A large explosion has taken place in the pro-Russia separatist-held city of Donetsk in the Eastern Ukraine Donbas region, Russia’s RIA news agency reported on Friday.

Market Reaction

The headline saw risk assets come under immediate selling pressure, with the S&P 500 dropping to fresh session lows around 4350 where it now trades with losses of around 0.6% on the day. NATO, and investors, fear that Russia is building up a case for a military incursion into Ukraine that it can sell domestically, which could be based around claims that Ukraine is committing war crimes and “genocide” against Russian speakers in Eastern Ukraine. A large explosion in Donestk will likely be used to further this narrative to pump domestic support for military action against Ukraine, so NATO (and investors) fear.  

This article was originally published by Fxstreet.com.Read the original article here.

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