RUSSIAN DEGENCE MINISTER SAYS EUROPE'S DELIVERY OF DRONES TO KYIV FOR STRIKES ON RUSSIA COULD LEAD TO UNPREDICTABLE CONSEQUENCES - IFX

Russia’s Defense Minister warned that European deliveries of drones to Ukraine for strikes on Russian territory could trigger unpredictable consequences, escalating geopolitical tensions in the region. This statement amplifies concerns over widening conflict spillover, affecting risk sentiment toward Eastern European assets and increasing premium demand for safe-haven instruments. The primary transmission channel is heightened geopolitical risk, which typically pressures equities in Central and Eastern Europe, strengthens the ruble on safe-haven inflows within Russia, and weighs on EU defense and aerospace stocks due to escalation fears. Markets most exposed include Russian and Ukrainian equities, European defense bonds, and regional currency pairs like EUR/RUB. Traders will watch upcoming EU foreign policy meetings for signals on potential restrictions or expansions in military aid to Ukraine.

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