Stock markets cautiously higher

Stock markets are back in positive territory on Wednesday as investors await Russia's response to initial sanctions from the West.

Tensions have obviously increased this week following Putin's decision to recognise the independence of two separatist regions in Ukraine but investors are not particularly deterred. We've seen plenty of risk aversion at times in recent weeks as the situation has escalated but as we've seen over the last 24 hours, the dips are still attracting interest.

As long as both sides continue to claim a desire to find a diplomatic solution and troops remain on the right side of the border, we could continue to see these kinds of rebounds. Markets have come under heavy pressure this year and investors are going to be tempted back in at these levels.

We're now in wait and see mode which probably means plenty more two-way price action as we await the next steps from Russia. Nerves will remain and the slightest escalation could see risk-aversion return. But until then, no news will be good news which could offer some reprieve for risk assets.

Oil off the highs but well supported

Oil prices are a little flat on the day but remain close to this week's highs just shy of $100. Traders are continuing to closely monitor events in Ukraine and any sign of escalation could be enough to propel crude prices into triple figures for the first time since 2014.

There is hope that a nuclear deal between the US and Iran will get over the line which could take some of the heat out of the market but we're yet to hit that breakthrough moment. The market remains very volatile as we await any development on both Ukraine and nuclear talks.

Gold holding onto gains as risk appetite improves

Gold is hovering around $1,900 and remains well supported even as risk assets enjoy a bit of a rebound. The yellow metal is proving to be a useful safe haven and inflation hedge in these highly uncertain times and it's holding onto gains well. Any corrective moves have been brief and shallow which probably says a lot about the sentiment in the markets right now.

$40,000 could be a big test for Bitcoin

Bitcoin is making small gains for a second day after coming under pressure for much of the last week. It had shown strong resilience prior to that but eventually got swept up in the risk aversion in the markets as tensions around Ukraine spiked. It's currently up around 3% on the day and faces an interesting test once more around $40,000. A failure at this level could be a blow, given the level of uncertainty in the markets at the moment.