• The US Secretary of State Blinken accepted an invitation from Russia to meet with Lavrov later next week.

At 0.7197, the AUD/USD has risen 0.16% in Asia as risk appetite returns to what appears to be more signs of diplomacy breaking through the cracks that are causing fear about an imminent war between NATO and Ukraine vs Russia.

The Australian had initially been cautious due to fears that Russia would invade Ukraine. According to a State Department spokesperson, the US Secretary of State Blinken accepted an invitation to meet with Russia's Lavrov later next week. This has calmed nerves in Asia. Joe Biden, the US president, will host a meeting with leaders from Canada, France and Germany on Friday.

Reuters reported this week that iron ore fell sharply after Beijing intensified its efforts to control the steel-making mineral. ANZ analysts noted that inventory of many resources was at an all-time low, as producers were trying to increase their stocks to counter the recent supply disruptions. This, along with the prediction of strong global growth, means that resources could weather higher interest rates.

Analysts at TD Securities said that aluminium prices could be vulnerable if geopolitical risks ease. This is because of the disruption lockdown in Baise, Chinese curtailments, and easing European power woes.

The analysts said that markets sensitivity to Ukraine risk will likely rise as February 20th approaches. This date marks the end to war games in Belarus and the West watches for signs that Russian troops may return to their base. Their failure to do so will likely lead to a significant rise in Russia's risk premium.

"In turn, positions that are benefited by a rise Russia risk premium have a significant time decay as traders must be accurate about the direction and timing of the risk -- axes for the majority of participants do not have much edge."