Crimean referendum to weigh on markets in Asia today
Canberra-Australia (Mar 17) How markets react to the actuality that the Crimean’s have, unsurprisingly, voted on Union with Russia as opposed to the prospect of it will be revealed today and over the next few days. But whatever happens it is unlikely to reduce tensions.
Likewise the incursion of Russian troops over the weekend into Western Ukraine just outside Crimea shows how tense things are and how easily inflamed they may become. Key to remember here is that water and energy of Crimea come from Ukraine and the Russians may be in a mood to secure this, or at least try.
I find the moves in the Euro recently to be the most baffling moves I have seen in currency markets for a decade or more.
On the preipice of deflation, with a still moribund economic union and with a potential conflagration on its eastern borders the Euro just shrugs it off like a teenager saying “whatever!” and marches higher.
Of course it tells you as much as about the US dollar as it does about the Euro and perhaps about the Yen as the dominant currency trend as its moves seem to be reflected in Euro and US dollars via EuroYen. But lets thing about Crimea and big bad Putin’s plans for the Ukraine.
My sense is that Putin’s gambit is not an underestimation of how much he has bitten off but a calculated push to see how much he can get away with before the West does something concrete. We know for a fact that he thinks the end to the Soviet Union was a travesty and we also know that he has grand plans for a Eurasian Union with Russia at its heart.
So the weekend push acroos the bridge from the Crimea into Ukraine was to me a feeling up exercise.
On that basis I want to own Euro and Stock market puts.
Anyway looking back to Friday it was another down day for US stocks with the Dow down 0.27% taking it’s losses for the week to more than 2%. The Nasdaq fell 0.36% while the S&P 500 lost 5 points to 1,841 for a loss of 0.29%. Worth noting is that consumer confidence released on Friday fell heavily to 79.9 versus the 82 the market expected.
In Europe the DAx managed, somehow, to rise on Friday up 0.42% but it was down 4% last week and is down something like 8% so far this month. Of course the German economy and German companies are the most exposed to these Russian shenanigans and Chancellor Merkel finally started talking tough on Friday to Putin. Elsewhere the FTSE fell 0.39%, the CAC dropped 0.8% while stocks in Madrid and Milan fell 1.39% and 1.19% respectively.
Locally on the ASX futures market the March SPI 200 contract was off 18 points to 5301 bid.