Markets may have taken their eye off the ball when it comes to the Russian threat

Market chatter is centred around the bond market and how close the US 10-year yields are to the psychological 2% level. Global central bank sentiment is taking the forex market for a slow dull ride, but so far, nobody is really talking about the elephant in the room, Russia.

The Ukraine crisis was dominating the press at the start of the year and February, but tension soon died down last week when Vladimir Putin accused the US of trying to goad Russia into a conflict. Russia has denied any plans to invade Ukraine,

Speaking after talks with Hungarian Prime Minister Viktor Orban in Moscow, Mr Putin said: “It seems to me that the United States is not so much concerned about the security of Ukraine... but its main task is to contain Russia's development. In this sense, Ukraine itself is just a tool to reach this goal.”

Markets have regarded the escalation over Ukraine as premature and that a diplomatic path is a more likely outcome. However, Russia had already assembled more than 100,000 troops near its borders. More recently, Russian warships have sailed toward the Black Sea on Tuesday, stoking alarm among the US and European security officials who warned that the final capabilities for a large-scale assault on Ukraine appeared to be falling into place.

This could start to get some traction this week as the market tires of waiting for the outcome of the Federal Reserve meeting in March.