February was a strong month for the major asset classes, but the prospects for more of the same in March are under threat in the wake of the deepening crisis in the Ukraine. Russia’s intervention so far has been limited to the Ukraine’s Crimean Peninsula, but tensions are growing as the US and Europe struggle to find the right policy mix to keep a lid on this potentially explosive situation that carries ramifications for the global economy. Leaving all that aside for the moment, prices revived last month after widespread losses in January. Leading the markets higher in February: commodities, which gained more than 6%, based on the Dow Jones-UBS Commodity Index. At the bottom of the pack: inflation-protected Treasuries, which nevertheless managed to eke out a small advance.

The generally upbeat trend last month supported the Global Market Index (GMI), which delivered a handsome 3.6% gain in February. For the year so far through February 28, GMI (a passive market-weighted mix of all the major asset classes) is ahead by 1.7%.

Any celebration tied to last month’s return of bullish enthusiasm is over before it’s begun as the world anxiously considers how the Ukraine situation will play out. “If we don’t see any calming in the coming days, we are bound to see more flows into safe havens, which means continued flows into the Swiss franc and U.S. Treasuries,” notes Simon Quijano-Evans, head of emerging market research at Commerzbank. Commodities may also benefit from any ongoing downsizing of risk exposures. Early Monday trading shows that crude oil and gold prices are up.

“It’s a reaction to the escalation in tension in Ukraine over the weekend … the traditional risk proxies are getting hit, and the safe havens are getting bid,” advises ANZ currency strategist Sam Tuck.