International Investment reports: For now, markets are not signaling an imminent invasion – if they were, we’d expect a number of clear signals including a strong flight to quality (US bonds) that would raise prices and therefore lower yields. We’d also expect spiking energy prices, falling stocks (especially European) and strong movement in ruble currency options. While some of these markets have moved modestly, there is currently no consensus.

To simulate the reverberating impact that open war might have, we examined the fallout from the Russian default and subsequent ruble collapse in August 1998.