Risky assets are often beholden to perceptions of geopolitical risk, though in recent times it has been a minor factor. Perhaps that is about to change. The conflict in Syria has taken a terrible twist that threatens to draw the major western powers into a conflict with Russia, with concomitant negative effects on credit markets.

The suspected gas attack by government forces in Douma has prompted aggressive rhetoric from President Trump via his usual medium of Twitter. The US administration had taken economic measures to damage Russia in the form of new sanctions. In particular, the extension of sanctions to securities and assets that have already been issued – the previous sanction only applied to new issues – will have a considerable impact on credit market access and financing costs for the sovereign and Russian corporates.