Forex research

[Alpari UK]

US Opening Call from Alpari UK on 14 March 2014

Risk aversion seen as we near Crimean referendum

* Traders risk averse ahead of Sunday’s Crimean referendum;
* Uncertainty surrounds the West’s response, outcome of the vote a foregone conclusion;
* Chinese growth concerns continue to weigh on investor sentiment;
* UoM consumer sentiment seen rising slightly to 82.

US futures are pointing slightly higher on Friday, although the overriding them in Europe so far appears to be one of risk aversion ahead of the Crimean referendum on Sunday. As it stands, the S&P is expected to open 2 points higher at 1,848 and the Dow 6 points higher at 16,114.

The outcome of the vote on Sunday is looking like a foregone conclusion given that more than half of people in the region are believed to be ethnic Russian and the vote itself is being carried out by pro-Russian forces. But this is not what is creating the uncertainty that we’re seeing in the markets today.

This uncertainty is being driven by the potential for tensions to escalate off the back of the referendum. The West has made it perfectly clear that they will not recognise the vote, regardless of the outcome. The only question now is how firm the West is willing to be with Russia should they carry out the vote and attempt to take control of the Crimean peninsula.

While any Western response is unlikely to come before the markets reopen next week, traders are clearly not willing to take that risk and are instead opting for the risk-averse play, in the form of Gold and the yen. I expect to see more of this as the day progresses. If there’s one thing we learned from the eurozone crisis, particularly in 2012, it’s that it can be very painful to hold what’s seen as “risky” positions over the weekend, especially when you know an event, like this, is taking place.

Also weighing on investor sentiment on Friday is the ongoing concerns about Chinese growth, following a number of disappointing economic releases this week. While I fully expect China to turn things round and achieve its initial target of 7.5% growth, it’s no surprise to see panic in the markets at the prospect of a hard landing. This is likely to continue to weigh on sentiment somewhat, until we see evidence that things are turning around. Corporate debt defaults are likely to be another major theme this year, with investors remaining vigilant as people talk more about the potential for a Chinese “Lehman-type” moment.

As far as today is concerned, the negativity surrounding both of the above situations is likely to be the main driver in the markets. This isn’t helped by a real lack of alternatives to focus on, with the economic calendar, for example, looking very thin. The only notable release today is the UoM consumer sentiment reading for March, and even this is likely to be largely overshadowed by events in Crimea.

 

[Alpari UK]

Daily Market Update - 14 March 2014 - Alpari UK

Market Analyst Craig Erlam talks about how Sunday's Crimean referendum is impacting markets on Friday and what the outcome is likely to be.

 

[Alpari UK]

Weekly market preview – 17 March 2014

This week is likely to start where last week left off, with traders really quite nervous about events in the Ukraine, with the referendum on Sunday potentially increasing tensions between Russia and the West, forcing the latter to impose sanctions that it clearly does not want to do. The uncertainty surrounding what comes next is clearly being reflected in the markets, with traders looking more and more toward the safe havens.

On top of this we have the ongoing concerns about Chinese growth hanging over the markets, although I do get the feeling this is just being used as another excuse for traders to favour safe haven assets. We had similar concerns around the same time last year and in the end, China comfortably achieved its growth targets. That’s not to say this year is going to be exactly the same, but I also don’t believe people are as concerned as the headlines are making out.

The week ahead is looking relatively quiet, in terms of economic data. The FOMC meeting is likely to be the main event this week, on Wednesday, with many looking at the press conference after for clues about whether the recent poor data is enough for the Fed to slow the rate of tapering. Earlier the same day we’ll get the minutes from the last Bank of England meeting along with a batch of unemployment data, so clearly, as far as economic events is concerned, Wednesday is going to be key. The other days are looking a little slower, although there will still be some important releases scattered across the week.


US

It may not be the busiest week of the month for the US, but it is arguably the most important right now, with the FOMC monetary policy decision playing a major impact on the markets and the economic recovery. While it can be argued that the week of the jobs report, usually the first of the month, is the most important, as the vast amount of economic data on offer gives us great insight into the health of the world’s largest economy, I don’t think that is the case right now. The FOMC monetary policy meeting is always important for both the economy and the markets, but during a time when the economy is going through such a fragile economic recovery, I believe this is even more true. With that in mind, the jobs report is only useful in that it allows us to predict (or at least try and in most cases fail) what the FOMC will do.

Fortunately, Fed Chair Janet Yellen and a few other policy makers have made it very easy for us so far this year. They’ve clearly stated that the tapering, or the scaling back of asset purchases, will continue on the current course, of $10 billion reductions per month, as long as the economic data doesn’t deteriorate too much. Now, some may argue that this line was crossed in both December and January, when data across the board was pretty poor, by US standards, including job growth which was well below the level needed to sustain the recovery. However, the Fed has been happy to let this slide due the poor weather, which in all likelihood was responsible for this deterioration.

That said, there’s only so long that the Fed can continue to blame the weather and the data in February wasn’t much better. I don’t think it has been bad enough to pursued the FOMC to reduce the pace of tapering this week, but the press conference, Yellen’s first since taking charge, could be very interesting. If Yellen continues to appear reluctant to slow the pace of tapering, is would suggest that it’s going to take something massive to knock the FOMC off its course. On the same note, any hint that the current data isn’t good enough may convince traders that a pause in tapering is coming, and could happen as early as April. Under this scenario, I expect we’d see some weakening in the dollar, as well as a boost to equities and US Treasuries.

As stated earlier, the rest of the week isn’t that busy. There’s plenty of economic data being released but this is dominated by, what’s viewed by the markets, as low or medium tier data. In other words, data that is unlikely to have a significant impact on the markets. Especially those releases that come in the 48 hours before the FOMC meeting, when traders tend to be a little more cautious. Of the data being released, the empire state and philly fed manufacturing figures, released on Monday and Friday, respectively, tend to get a lot of attention. Existing home sales, released Thursday is another worth keeping an eye, as is the weekly jobless claims.

UK

In terms of data, it’s also looking like a very quiet week for the UK. The public sector net borrowing figure released Thursday may be of interest, although it’s unlikely to have a significant impact on the markets. Some reaction may be seen in sterling but unless the figure is drastically worse or better, even this is likely to be minimal. The key day for the UK will be Wednesday, when the unemployment data will be released, along with the minutes from the latest MPC meeting, at 9.30 am GMT.

The latter is likely to be something of a dull affair, given that the Bank of England has been very clear in its stance on monetary policy in the foreseeable future. Any rate hike or change in asset purchases in the next couple of quarters is extremely unlikely and therefore the voting on both of these is likely to be unanimous, with all nine policy makers voting against a change.

The unemployment data may be of more interest, although even this has become less significant since BoE Governor Mark Carney announced the changes to the BoE’s guidance on interest rates, or forward guidance 2.0. The MPC will now consider a whole range of data when making a decision on interest rates and none of these currently suggest this will happen any time soon. There is still an abundance of slack in the economy, as policy makers repeatedly put it. In other words, productivity levels are still very low and this will need to be addressed if we’re going to see a strong recovery. Unemployment is also still high at 7.2%, where it is expected to remain, and inflation is below the BoE’s 2% target so there’s no pressure to raise interest rates any time soon.

Eurozone

It’s going to be another very quiet week for the eurozone, even more so than in the US and the UK. In terms of economic data releases, it really is slim pickings. The revised CPI reading, scheduled for release on Monday, is expected to show inflation at 0.8%. These numbers are very rarely revised, in fact, last months revision was the first since September 2012, so I don’t hold much hope for another revision. What this means is that it is very unlikely to change the European Central Bank’s inflation expectations, and therefore, view on the appropriateness of its currently monetary stance. With that in mind, traders are likely to be relatively unresponsive to it, should it remain at 0.8%. Any drop could prompt some euro weakness, although based on Draghi’s recent press conference, I imagine it would have to be a significant drop to convince them to respond in order to prevent further falls toward the dreaded deflationary levels.

The only other notable economic release this week is the German and eurozone ZEW economic sentiment figures. Both of these have been moving steadily higher since the start of last year, as the economy of the eurozone has improved, albeit at a very slow pace. That said, the optimism that’s growing with every passive month is extremely encouraging and is essential if the recovery is going to gather pace. We’re already seeing investors looking at the eurozone very differently than they did 12-18 months ago, as seen by the drop in bond yields for the periphery. It’s only a matter of time before investors want to invest more directly in these countries and these improving numbers suggest that isn’t too far away.

Asia & Oceania

Following such a big week of economic data and central bank meetings, it’s no surprise to see these countries taking a bit of a breather this week. It’s going to be a very quiet week for Japan, and a short one at that, with the bank holiday on Friday. The only notable release here this week will be the trade balance figure, released on Tuesday. And even this seems to carry less importance nowadays, with the country recording growing deficits since the middle of 2011. That said, the size of the deficit is expected to shrink significantly to ¥0.89 trillion, which would be the lowest since August. Other than that we have a couple of speeches from Bank of Japan Governor Haruhiko Kuroda on Wednesday and Thursday, but these are unlikely to offer much, with any additional easing from the BOJ unlikely to come until after the rise in the sales tax, in April.

In Australia we’ll get the minutes from the Reserve Bank of Australia meeting earlier this month. The RBAs stance has changed significantly recently, turning a lot more hawkish, while doing its best to warn against strengthening in the Aussie dollar. We’ve seen numerous efforts from the RBA to weaken its currency, which it believes has become too strong and is damaging the economy. For now it appears to have run its course, with respect to interest rate cuts, due to the rapid rise in inflation. We may see more attempts by the RBA in the minutes to verbally weaken the currency.

Finally we’ll get the fourth quarter GDP reading for New Zealand on Wednesday. Last week, the Reserve Bank of New Zealand became the first central bank of the developed economies to hike interest rates, a trend that is likely to catch on later on this year and into next. They also raised growth forecasts for this year and the following two, and quite ambitiously in some people’s view. Clearly the RBNZ is very optimistic on the outlook for the economy, and correctly so, which would explain why we’re expectation quarterly growth of 1%, a great effort if you compare it with growth rates of other developed nations.

 

[Alpari UK]

UK Opening Call from Alpari UK on 17 March 2014

Risk aversion continues as Crimea votes to join Russia

• Crimea votes to leave the Ukraine in illegal referendum;
• Traders act with caution ahead of the West’s response;
• Safe havens pare gains but further upside seen;
• Eurozone inflation expected unchanged at 0.8%.

Traders have remained risk averse on Monday, after the vote in Crimea showed 93% of people wanted to secede from the Ukraine and rejoin Russia. European futures are looking relatively flat this morning, with the FTSE seen opening 5 points higher, the CAC 2 points lower and the DAX 8 points lower.

The result was widely expected and is not the reason why traders are acting with caution at the start of the week. The West has repeatedly stated that it will not recognise the vote, which it believes is illegal due to the conditions that it was carried out under. If Russia now attempts to take control of the Crimean peninsula, the West will have no option but to take action, probably in the form of additional sanctions, which could escalate things further.

Clearly Russia is not interested in a diplomatic solution that involves Crimea remaining part of the Ukraine, and likewise the West has no intention of allowing Russia to just take control of the region. Both sides will be fully aware that the other has the potential to cause a significant amount of pain for the other, which is why neither will want to throw the first punch. The reality is that we’re likely to see a long drawn out stand-off between the two, which traders will eventually become bored of and move on to the next thing. I don’t think anyone expects this to escalate much further as everyone has too much to lose and too little to gain.

That said, traders are continuing to play it safe for now, especially in the absence of any positive news that could act as a distraction. Safe havens, such as Gold and the yen, are continuing to benefit from the from all of this, although this morning they are both trading slightly lower which is probably more a case of them paring recent gains than a sign that risk appetite is picking up.

All things considered, the week ahead probably won’t be all that different than the one just gone. Aside from Wednesday, when we’ll get unemployment data from the UK, Bank of England minutes from the meeting earlier this month and the Fed decision and press conference, the rest of the week is looking fairly quiet.

The revised eurozone CPI reading, being released this morning, is unlikely to cause much of a distraction. The number is rarely revised and given the ECBs hawkish stance at the last two meetings, it would take a significant downward revision to convince them to loose monetary policy further. Especially as they’d have to delve into uncharted territory, with interest rates being at 0.25%, which they don’t appear too comfortable with. The US session isn’t looking any better, offering only a few low-tier economic releases that rarely have much market impact.

 

[Alpari UK]

US Opening Call from Alpari UK on 17 March 2014

Markets correct as traders await Europe’s response

US futures are pointing higher ahead of the opening bell on Wall Street. The S&P is currently expected to open 5 points higher, the Dow 60 points higher and the Nasdaq 16 points higher.

While futures are currently pointing higher, there is going to be an element of caution from traders who will be keeping a very close eye on the developments in Crimea. Yesterday’s referendum went exactly as expected, with residents voting to leave the Ukraine and join Russia. As yet, we haven’t had a response from the West, most likely in the form of sanctions, but I imagine this won’t be far away.

It is the response from the West that the markets are concerned about, as this is what could escalate things very quickly, should it prompt a retaliation from Vladimir Putin. The West is in a difficult position here as it knows that Putin has the ability to inflict substantial pain as well, and would probably be willing to do so if he feels Russia is being unfairly treated. At the same time, the West needs to appear to be firm against what it believes is an illegal occupation of Crimea.

For now, the markets are happy to push higher, especially in the absence of anything else weighing on sentiment. The lack of economic data is actually working in the markets favour to an extent today. The last week or so has been fairly negative, so a lack of developments in Crimea and poor economic data, which we’ve had an abundance of so far this year, is allowing for a bit of a correction.

Whether this continues is dependent on the response to the referendum. Foreign ministers from Europe are believed to be discussing sanctions today, which are believed to be targeted at individuals rather than Russia as a whole. This may not be enough to provoke a retaliation, but you never know with Putin.

 

[Alpari UK]

Daily Market Update - 17 March 2014 - Alpari UK

Crimea worries fail to bring down markets - 00:09
Eurozone CPI falls back to 0.7% for February - 02:15
A look ahead to the week - 03:42

 

[Alpari UK]

UK Opening Call from Alpari UK on 18 March 2014

European futures ease after Monday’s relief rally

• European futures flat after Monday’s relief rally;
• Traders pleased with weak sanctions from the West;
• Talk of another Chinese bond default hits property stocks;
• RBA offers its own forward guidance in latest minutes;
• More economic data on offer on Tuesday.

European futures are treading water on Tuesday, following a positive start to the week that saw strong gains in Europe, the US and Asia. The FTSE is currently seen opening down 3 points at 6,565, the CAC down 8 points at 4,263 and the DAX down 2 points at 9,178.

What we saw yesterday was a relief rally in the markets following all of the uncertainty over the weekend around how the US and Europe would respond to Russia’s attempts to illegally take control of the Crimean peninsula. The concern here was that if the West imposed harsh sanctions, the Kremlin may feel it needs to retaliate. This could escalate things very quickly and make a diplomatic solution even harder to come by, which is something that would not benefit anyone.

As it turns out, we had nothing to worry about as the sanctions agreed upon by the US and Europe were pretty weak and highly unlikely to prevent Vladimir Putin from taking control of Crimea. What we’ve seen here is the West’s unwillingness to take on Putin as it knows that he can also cause them significant pain. In effect, the West has shown its hand and it’s not very good.

This is music to the markets ears right now and could allow it to have a fairly decent week, that is of course, unless things take a turn for the worse, which could clearly still happen. For example, Putin could still respond to the sanctions imposed by the West by reducing Russia’s oil exports, something Europe in particular relies heavily on right now, or the West could impose harsher sanctions if the initial batch have no impact. Should this happen I imagine we’ll see yet another flight for safety, with investors moving back towards assets such as Gold, US Treasuries and the yen, all of which eased off yesterday.

Chinese property shares took a bit of a hit overnight, after reports suggested that a real-estate developer was close to defaulting. This would be the second corporate bond default in quick succession, following a 17-year spell in which no corporate bonds were allowed to default. This would be yet another signal from the Communist Party that these bad companies will no longer be supported, although once again this is another default that is unlikely to have a ripple effect. The true test will come when something much more significant borders on default.

Also hitting the Chinese property market was data that showed prices on rose 8.7% in February compared to a year earlier. This is clearly extremely high by most countries standards, but not so for China, where rises have been closer to 10% in the last six months. It has been suggested that the drop was driven by a crack down on corrupt officials that own hidden investments, such as property. Government officials will now be forced to declare their property holdings which apparently sparked a quick-fire sale of properties in Beijing, which drove prices lower.

The minutes of the latest Reserve Bank of Australia meeting, released overnight, showed that the central bank intends to keep interest rates at these record low levels for some time. This, in effect, is the RBAs own version of forward guidance and like the first attempts of most of the major central banks offers very little and is very subjective. Either way, it is encouraging for Australian businesses and households, but at the same time highlights the fact that any further interest rate cuts are unlikely due to rising inflation levels. In effect, the RBA is already running out of policy options.

The economic calendar is offering a little more today, in terms of high tier data, the first of which is the ZEW economic sentiment figures for March. The eurozone and German figures are both expected to ease slightly to 67.3 and 53, respectively, but this is still very good and is more than likely just a brief dip in an otherwise strong uptrend in the numbers. Later on in the US we have the CPI inflation readings for February, building permits and housing starts for February, and the Fed will begin its two day monthly meeting.

 

[Alpari UK]

US Opening Call from Alpari UK on 18 March 2014

US futures higher following Putin comments

* Putin speech sends US futures into the green ahead of the opening bell;
* Negotiations between Putin and the West likely to drag on;
* US housing data positive as building permits rise above a million for first time since November;
* FOMC starts its two day monthly monetary policy meeting.

US futures are pointing higher again on Tuesday, following a speech in front of Parliament by Vladimir Putin in which he claimed that Crimea is now part of the Russian Federation, while assuring people that he will never seek a confrontation in the West. Traders responded very positively to this, as seen by US futures which had previously been trading in the red but are now expected to open higher. The S&P is seen opening up 3 points, the Dow up 50 points and the Nasdaq up 8 points.

Traders had previously been concerned that any sanctions made against Russia could provoke a retaliation from the Kremlin, but this does not look likely. Not only were the sanctions by the US and the EU on 11 and 21 Russian and Crimean officials, respectively, viewed as weak by the markets, Putin did not appear concerned about them in the slightest. In fact, he didn’t even mention them in his address before Parliament.

Putin’s comments on the whole gave the impression that Russia wants a peaceful solution on the matter but that is unlikely to be enough for the West, which still views the annexation of Crimea as illegal and does not recognise Sunday’s referendum. This is unlikely to change given that the vote did not include an option to remain part of the Ukraine and was carried out under the threat of violence.

I imagine that the best outcome for Russia here would be another fair vote being carried out in Crimea that included the option to stay and no threat of violence. Should the people then vote to join Russia, the West may accept it. Even this seems a long shot though at this stage and is unlikely to happen any time soon.

One thing Putin’s comments do suggest is that the odds of this escalating further have been slashed. The West may make another attempt at sanctions but based on its first efforts, it’s clearly too afraid to be overly aggressive and provoke a retaliation. Eventually we will have to find a diplomatic solution to this, the only downside being this is unlikely to be quick. What we’re likely to see now is this disappear from the headlines and the markets move onto the next issue, which based on recent reports will probably be China.

With the markets now clearly quite relieved on this issue, attention can turn back to the economy. Already today we’ve had some mixed housing figures from the US, with building permits rising to 1.018 million in February, well ahead of expectations, and housing starts falling slightly short at 0.907 million.

US inflation also fell more than expected but at 1.1%, this isn’t really much of a concern to traders. Not until it approaches the Fed’s 2% target will traders start to be concerned about this as it is not going to pressure them to hike interest rates. Even then, the Fed’s preferred measure of inflation is the core personal consumption expenditure index, so the CPI reading tends to have less of an impact.

The rest of the day is likely to be fairly quiet, with only low-tier economic data being released. Tomorrow though we do have the FOMC monetary policy decision, followed shortly after by Janet Yellen’s first press conference as Fed Chair. The FOMC is expected to reduce its asset purchases by another $10 billion tomorrow, but the potential market moving action could come during the press conference, when Yellen could provide any insight into whether the FOMC has considered slowing the rate of tapering.

 

[Alpari UK]

Daily Market Update - 18 March 2014 - Alpari UK

https://www.youtube.com/watch?v=K2NGcf05Mnc&list=PL9AE6BFC876359986

Chief market analyst at Alpari UK James Hughes looks at the major stories that have been dominating financial markets over trading day. He looks at Vladimir Putin's press conference and how the crisis on the Crimean peninsula has been moving markets. He also evaluates the recent CPI reading from the US and how the risk of deflation could well affect Janet Yellens decision at this week's FOMC meeting. Finally he looks ahead to tomorrows UK budget as Chancellor George Osborne attempts to manage UK funds and please both voters and the markets with his newest plans.

 

[Alpari UK]

UK Opening Call from Alpari UK on 19 March 2014

The spotlight is going to be on the UK for much of the European session on Wednesday, starting shortly after the open with unemployment data and minutes from this month’s Bank of England meeting, both of which are due to be released at 9.30am GMT. Of the two, the labour market data is likely to be followed more closely, as the BoE has made it very clear that no changes to monetary policy are likely in the near future. Given that the central bank recently updated its forward guidance to include a broader set of data, there’s unlikely to be anything in the minutes that surprises anyone, let alone moves markets. That means the vote on asset purchases and interest rates remaining unanimously in favour of no change.

Given the above point about the BoEs change in focus towards a broader range of data, when it comes to setting policy, average earnings could become a greater focal point this year. Wage growth has been severely depressed in the UK since the economic downturn, especially when compared to the cost of living over the same period. While this has been well documented, little has been done about it as it’s been seen as the lesser of two evils. In other words, getting people back to work was seen as a far bigger priority than ensuring those in work are paid better.

With the UK now finally emerging from the crisis and unemployment falling, wage growth is likely to become a bigger issue. This has already become a key debate politically and will continue to be ahead of the 2015 elections, hence the sudden calls for a rise in the minimum wage in order to sway voters. But this is also something the BoE is focused on and should come, it is hoped, as productivity levels rise. The figures for January are expected to show wages increasing by 1.3%, including bonus’, and 1.2% excluding bonus’. While this is still low, it still an improvement and at a time when inflation is also falling, means the gap between the cost of living and wage growth is narrowing, which is very important for the economy.

The unemployment rate, while still being a very important piece of data, is generally viewed as less important now that the BoE has updated its forward guidance. While it’s always encouraging to see the rate of unemployment falling, meaning the economy is improving, the markets are only really concerned with when the BoE will hike interest rates and as this alone will no longer tell us that, or even give us much of a clue. The rate is expected to remain at 7.2% in January, having risen slightly in December from 7.1%.

With the economy showing signs of improvement in many areas, this is likely to be one of the easier annual budgets that the UK Chancellor of the Exchequer George Osborne has had to deliver. While lauding the achievements of the coalition government so far, Osborne will continue to warn that the job or repairing the broken economy is not over and difficult decisions still need to be made. While the annual budget will always be viewed as a major event in the UK calendar, it’s impact on the markets has diminished somewhat in recent years and this year is being viewed as even less important. Maybe people are distracted by the conflict in the Ukraine, or maybe people just don’t care about the budget any more. At the end of the day, while the detail of the budget are important, the budget itself is viewed by many as just another opportunity for politicians to attack each other and write their own headlines with misleading slogans.

Later on this evening it’s over to the US for the latest monetary policy decision from the Federal Reserve. Based on the comments from Fed officials in the last month or so, including Chair Janet Yellen, we’re likely to see another $10 billion reduction in the Fed’s monthly asset purchases this month, bringing the facility down to $55 billion. This will be followed by Yellen’s first press conference as Chair when she will likely shed more light on the current views of the central bank, given the mediocre economic data as of late, as well as it’s updated economic forecasts and potentially an update to its forward guidance. This is likely to be similar to the update we had from the BoE last month, with a broader range of data being taken into consideration.

Ahead of the open we expect the FTSE to be up 5 points, the CAC unchanged and the DAX up 18 points.

 

[Alpari UK]

US Opening Call from Alpari UK on 19 March 2014

Caution seen ahead of Fed decision and Yellen

* Traders cautious ahead of FOMC decision and Yellen press conference;
* BoE minutes a non-event, unemployment remains at 7.2%;
* Yellen expected to amend Fed’s forward guidance and announce new economic forecasts;
* Recent years suggest UK budget unlikely to have much market impact.

US futures are pointing slightly higher on Wednesday, although not very much highlighting a clear an element of caution being adopted ahead of the FOMC decision and press conference. Ahead of the opening bell on Wall Street, the S&P is expected to open 1 point higher, the Dow 13 points higher and the Nasdaq 2 points higher.

Caution ahead of the FOMC decision is perfectly normal and the only times we don’t see it tends to be when nothing interesting is expected from the central bank. Of course that has rarely been the case in recent years but the perfect recent example of that is the Bank of England, who’s rate and asset purchase decisions have become something of a non-event. Even the minutes, which were released earlier on today, got very little response from the markets, with sterling move a fifth of a cent against the dollar before settling.

This is largely due to the fact that the UK economy is performing very well and inflation is coming down. Therefore, the central bank is showing no willingness to change anything, either through rate hikes and cutting asset purchases, or additional monetary easing. The BoE has communicated this very clearly and has even adopted a more subjected forward guidance which hasn’t created any uncertainty at this stage.

This may be the route that the Federal Reserve is headed for under the leadership of Janet Yellen. The FOMC is determined to continue its gradual tapering of asset purchases, with the idea of ending the program altogether later this year. Once this has been completed, I imagine the meetings will become less of an event for the markets as we’ve seen with the BoE, as long as the economy doesn’t falter again of course.

Today’s meeting though is likely to be a little more eventful. Not because of uncertainty surrounding whether the Fed will taper, as it has in previous months, the market is pretty much convinced that another $10 billion reduction will be announced. The caution being seen ahead of today’s meeting is related to the new economic forecasts that Yellen will deliver, during her first press conference as Fed Chair, and the expected amendment to the Fed’s forward guidance on interest rates which I believe will bring it more in line with the BoE.

As it stands, the FOMC has committed to maintaining low interest rates well beyond the point when unemployment falls below 6.5%. This is wearing a little thin with unemployment currently being at 6.7%. Yellen is expected to announce later that the FOMC will use a variety of economic indicators when making their decision going forward while providing assurances than no rate hike is likely for some time yet.

Regardless of what is expected to happen, expectations have been very wrong in the past, especially when it comes to predicting what the Fed will do so I expect this cautious approach to continue from now until the press conference. The rest of the day is offering very little from a US perspective. In the UK, Chancellor of the Exchequer is about to deliver the annual budget, which is recent years hasn’t been much of a market moving event. This is just another opportunity for the coalition government to congratulate themselves on a job well done and for the opposition to pick holes in their plans for the year ahead.

 

[Alpari UK]

Daily Market Update - 19 March 2014- Alpari UK

https://www.youtube.com/watch?v=w45vWoYAJR4&list=PL9AE6BFC876359986

A widely positive jobs report from the UK - 00:25
MPC minutes disclose worries over strength of GBP - 02:01
UK 2014 budget expected to emphasise both strength and ongoing tightening - 03:07
FOMC meeting expected to taper and bring further forward guidance - 04:27

 

[Alpari UK]

UK Opening Call from Alpari UK on 20 March 2014

Europe expected to open lower on Yellen rate hike claim

* Yellen’s mid-2015 rate hike claim spooks investors;
* Caveats important but investors not interested;
* US labour market, housing and manufacturing in focus today.

European futures are pointing to a fairly negative start to the session on Thursday, after Fed Chair Janet Yellen spooked the markets by suggesting we could see the first hike in interest rates in the middle of 2015. As it stands, the FTSE is expected to open 33 points lower, the CAC 33 points lower and the DAX 75 points lower.

Last night was a prime example of the market hearing only what it wants to hear and ignoring all of the caveats, which more often than not make the initial statement irrelevant. This mistake has been made repeatedly in the past and it appears traders have not learned from their mistakes. A great example of this was former Fed Chairman Ben Bernanke’s claim last May that the Fed would taper “later this year”, adding that this was dependent on the strength of the economic data. In the end, the Fed did taper in December, but investors had convinced themselves that he was hinting at September, despite the economic data at the time being below par. On this occasion they chose to ignore the caveat and a lot got burned, it will be interesting to see if history repeats itself next year.

Another interesting point here is that many in the markets have assumed for a while that the first rise in interest rates could come as early as the middle of 2015, so these comments from Yellen are only in line with expectations. Maybe a lot of the drop in the indices, and dollar rally and gold dive for that matter, can be attributed to the growing number of FOMC members that saw rates rising to 1% by the end of 2015.

Regardless, I think what we saw yesterday was a case of Yellen showing her inexperience in this situation, which is perfectly understandable given that it was her first press conference as Fed Chair. Of course Yellen has been a member of the Fed for years, so is not inexperienced in that sense, but her views as Chair are likely to carry more weight and therefore have a greater market impact than before. Having seen the market reaction, she may choose her words more wisely in the future and be a little less specific. That seems to work for most central bankers, unless of course the hints are intentional, but I don’t think that was the case on this occasion given how far away the first rate hike is. Taking into consideration Yellen’s comments, I still don’t think the first rate hike will come until later in 2015, although a lot can change between now and then.

Now that traders have had time to digest Yellen’s comments and look beyond her words to what she actually meant, I think we could see a small correction this morning. There’s no noteworthy economic data being released during the morning of the European session so last night’s comments are likely to be key drivers of markets again. Things should pick up again just before the US open, with the release of a wide range of data on the labour market, housing and manufacturing.

Weekly jobless claims are expected to return to normal levels, around 327,000 after last week’s surprise drop to 315,000. Existing home sales for February are expected to rise 0.8%, following a dire January which saw sales drop 5.1%, although a lot of this can probably be attributed to the terrible weather. Finally we have the Philly Fed manufacturing number, which is expected to rise back up to 4.0 after dipping into negative territory in January for the first time since May, again probably due to the weather.

 

[Alpari UK]

US Opening Call from Alpari UK on 20 March 2014

Markets continue to fall following hawkish Yellen perception

• Janet Yellen shocks markets with hawkish outlook
• US asset purchases likely to end in 2014
• New Zealand GDP growth falls

Both European indices and US futures have been moving lower following yesterday’s announcement from Janet Yellen that brings expectations of interest rate hikes closer to home. The continuation of asset purchase tapering was largely expected, trimming bond-buying by another $10 billion to $55 billion per month. However, it was the particularly hawkish comments from Yellen which took markets by surprise, bringing the US dollar bulls back to the table and caused the US markets to pull back sharply. Whilst the announcement that rates would be likely to start rising ‘around six months’ after asset purchases, this is not neccesarily anything too new in terms of a timeline seen by many.

As expected, an element of ‘forward guidance’ has been implemented, citing the requirement for rates to remain in place as long as projected inflation remains well below the 2% Federal target, along with ‘a wide range of information’. This gives Yellen substantially more leeway than Bernanke in her decision of when rates should rise, bringing an element of uncertainty despite her fairly stark prediction of a six month lag between the end of asset purchases and the beginning of interest rate hikes. Thus whilst yesterday marked the beginning of a new Yellen Fed, it seemed to also mark the end to the transparency seen under Bernanke by signing away the so-called ‘Evans rule’ which attached distinct thresholds to interest rate guidance.

The decision by the Fed to taper asset purchases was certainly no surprise, given the predictable eagerness of the Fed to show that they are set on a strong path of asset purchase reductions despite a weakening in key jobs data. Whilst poor non-farm payroll figures were previously attributed to adverse weather conditions seen in December and January, the February figure could not utilise that same reasoning and thus the decision by the Fed is notable for the fact that it comes despite clear deterioration in key jobs data. However, the decision to taper now sets a marker, meaning that we know that as long as payrolls do not push lower than 175k levels and unemployment remains at or below 6.7%, then we are likely to see a continuation of the current pace of asset purchase reductions. Based upon the current trajectory, we are likely to thus see a taper in the 6 remaining meetings within 2014, bringing an end to QE in December 2014. Ultimately, I believe that despite Yellen deciding to express a possible six month timeline, the imposition of more vague quantitative guidance means we more emphasis will be placed upon qualitative guidance going forward.

Overnight, the release of growth data out of New Zealand showed a slowdown in the region, with Q4 2013 coming in at an underwhelming 0.9% along with the Q3 figure being revised lower to 1.2%. This comes amid a period of expansion for the economy, where the recent interest rate hike shows an emphasis upon the inherrent growth within the economy withou the need for monetary stimulus. This brings about a possibility that the RBNZ has moved a little too early in their policy decision earlier this month and will likely impact decision making going forward. Despite this clear slowdown in the rate of growth, the announcement came with a bullish outlook for exports, which rebounded strongly in Q4. However, it is notable that dairy exports have been suffering, given that this sector is highly dependant upon the Chinese market which has been slowing significantly.

Looking ahead, the US future point towards a negative open, with S&P500 -8 and the DJIA -44 and NASDAQ -12 points.

 

[Alpari UK]

Daily Market Update - 20 March 2014 - Alpari UK

Market Analyst Craig Erlam talks about the market response to the FOMC decision and press conference and today's encouraging economic data.

 

[Alpari UK]

UK Opening Call from Alpari UK on 21 March 2014

Risk aversion seen ahead of nervy weekend

• UK borrowing seen rising to £8.55 billion in February;
• Canadian inflation and retail sales eyed later;
• US steps up sanctions as the Duma approves Crimean treaty;
• Risk aversion likely ahead of nervy weekend.

The final European session of the week is shaping up to be a fairly quiet one, which is being reflected in the futures ahead of the open this morning. As it stands, the FTSE is expected to open down 6 points, the CAC up 11 points and the DAX up 13 points.

One reason for this is the lack of economic data or events scheduled for the final day of the week. The European session is going to be dominated by a few low tier economic releases, such as eurozone current account data and Italian industrial orders and sales. The impact of these of the markets tends to be minimal at best and as a result, traders have a tendency to ignore the releases altogether.

The UK public sector net borrowing figure may have some impact on the British pound, as it will give us some indication of how much the country will borrow this year and whether the Chancellor will meet his target. Should the UK borrow more than its target, then George Osborne would be forced make up that failure with additional austerity that could hurt growth. The flip side of that though is that if the UK borrows less than initially thought, it could either clear the deficit ahead of schedule, or use the additional capacity to fund growth friendly schemes.

Things are unlikely to pick up much after the opening bell on Wall Street. The economic calendar is looking equally thin then as well, with the only notable data here coming from Canada and the eurozone. Shortly before the US open we’ll get Canadian inflation and retail sales figures. The official CPI reading is seen falling to 0.9%, year on year, in February, from 1.5% the month before, while retail sales are expected to bounce back in impressive fashion from December’s 1.8% decline to rise 0.7%.

One thing we may see today from traders is a little more caution and even risk aversion as we near the end of the week. Things are beginning to heat up again between Russia and the West, following Russia’s annexation of Crimea. Russia’s lower house of Parliament – the Duma – has already approved the move, which the West has deemed illegal, and the upper house is expected to do the same today.

The US and the EU imposed sanctions on a number of Russian and Ukrainian officials linked to the takeover of Crimea, earlier this week, in a move deemed by the markets as weak. This was seen as a positive thing at the time as it reduced the potential for escalation, but it appears that was just a short term view. Russia has since responded with sanctions of its own on nine US officials including House Speaker John Bohner and Senate Majority Leader Harry Reid. Russia has made it clear that any action from the US and the EU will get an equal reaction, in this case this was Russia responding to the initial weak efforts of the US with similarly weak sanctions of its own.

However, US President Barack Obama has already signed an order to impose further sanctions on Russia, the victims of which will be Bank Rossiya and 20 people linked to the annexation of Crimea. This is now likely to get another response from the Kremlin, potentially over the weekend which is what may make traders a little edgy as we approach the end of the trading week. While I don’t expect the situation to escalate much over the weekend, we’ve seen it time and time again that things take a turn for the worse and investors panic prompting markets to open lower next week. Traders will have to decide today whether it’s worth taking the risk, or parking their money somewhere safer, like in Gold, US Treasuries or the yen, as we’ve seen in the past.

The situation here is not getting any better and if anything, the war of words is getting a little more fiery. German Chancellor Angela Merkel yesterday claimed that right now, the G8 no longer exists, in other words Russia is no longer considered a member. Meanwhile, Russian Foreign Minister Sergei Lavrov warned US Secretary of State that the reunification of Crimea with Russia is not up for review and should be respected. Under the circumstances, neither side looks like backing down which means this is unlikely to go away any time soon.

One thing that may be a concern to traders is suggestions by Ukraine’s ambassador to the UN that there are indications that Russia is preparing a military intervention in south and east Ukraine. Russia has denied that this is the case, but if it turns out to be true, this is certainly the kind of event that could really impact markets at the open next week.

 

[Alpari UK]

Daily Market Update - 21 March 2014 - Alpari UK

Market Analyst Craig Erlam gives a quick overview of what moved markets this week, what they're doing today and what he expects in the final hours of the trading week.

 

[Alpari UK]

Weekly market preview – 24 March 2014

The final week of March is upon us, where markets look to settle into a new rhythm following the introduction of the newly revised ‘forward guidance’ under Janet Yellen. As such, when the final week of the month typically does not include the FOMC meeting, trends show that we often see lowered volatility ahead of the busy week ahead. Of the predominant events, the main event to note in the US is the final GDP reading due on Thursday. Meanwhile in the UK, we will be looking to see if the CPI measure of inflation continues on it’s downward trajectory. On the other hand, the eurozone focus is likely to be geared towards the release of both manufacturing and services PMI figures on Monday.

In Asia, a somewhat quiet week is likely to be dominated by the latest HSBC manufacturing PMI figure, due to be released in the early hours of Monday. In Japan, the retail sales figure will be highly notable ahead of the proposed sales tax.


US

This week marks a somewhat lull inbetween the volatility magnets of the FOMC announcement just gone and the jobs report next week. The importance of the announcement from Janet Yellen with regards to monetary tightening and forward guidance are certainly not likely to be understated. Thus as we go forward, the newly expanded guidance will likely draw additional interest from the markets. That being said, this week is unlikely to draw too much event driven volatility, with the major events coming in the form of the final GDP revision for Q4 2013, along with the consumer confidence survey.

The most important release of the week comes on Thursday, when the final GDP reading for Q4 2013 is released. The importance of the GDP measure of economic growth is unlikely to be underestimated despite some of the emphasis moving more closely to employment data in recent years. Despite this, the rate of GDP remains probably the most comprehensive measure of economic expansion available and remains the go to guide of who is performing the best following the 6 year global downturn. For that reason, any change in the rate of GDP is always closely followed and has the potential to significantly shock the markets. Given that this is the final reading of Q4 2013, there is the possibility that markets take any shock with a pinch of salt given the new focus upon 2014 figures. However, with a weather driven slowdown in Q1 hurting the economy, a strong Q4 base would be welcome to build upon ahead of next months Q1 figure. Market estimates point towards a rise in this figure to 2.7% from 2.4% in the preliminary release.

Also, be on the look out for the CB consumer confidence figure, due out on Tuesday. This is somewhat less likely to grab the headlines given that this represents a survey. However, with consumer spending representing two thirds of the US GDP, I am always keen to see how confidence is within the economy. Last month saw a substantial fall in this index, yet this came off the back of a particularly strong figure above 80, which has only been achieved four times in the last 6 years. The expectations are for noticeably smaller move this month, where forecasters are looking for a moderate rise to 78.7 from 78.1 for February.

UK

An important week for the UK, where the release of the CPI measure of inflation, alongside the retail sales growth rate are likely to dominate the focus of the markets. These two figures are brought to the limelight in part due to the forward guidance under Mark Carney which has been updated to incorporate not only price stability but also will look at elements such as consumption and economic activity.

On Tuesday, the latest CPI inflation rate is announced, with many expecting to see it continue the recent downward trajectory. The days of above target inflation approaching 3% appears to be confined to 2013, with rates falling below the 2% target rate for the first time in over four years last month. Inflation is probably the most notable indicator of whether the BoE are able to either tighten or loosen monetary policy given that price stability is the primary mandate as dictated by the chancellor. Should inflation be well above 2%, there is a likeliness that interest rates could need to rise to bring it back in line, whereas a period of disinflation which threatens possible deflation can cause looser policy, as seen recently in the eurozone. In the case of the UK, this seems unlikely, yet we are looking for CPI to plateau at some point to give us an idea of when Mark Carney is going to see interest rate hikes as relevant. Estimates point towards a further fall in this figure, towards 1.7% following the 1.9% rate seen last month.

On Thursday, the retail sales figure is released, with many in the markets looking towards measures of consumption and earnings growth following the forward guidance ‘upgrade’ recently. Under the new policy, the BoE will be looking at a lot more wide ranging indicators such as earnings growth and consumption to derive an outlook for when rates should be increased. Apart from this, retail sales are always a key barometer of economic health from the viewpoint of the everyday person. Given that retail sales are influenced by both current and future conditions, this figure is both current and forward thinking. Market estimates point towards a move back into positive territory with a figure around 0.5% following a fall of -1.5% in last months release.

Eurozone

A somewhat front loaded week ahead in the eurozone, where the most important releases come on Monday and Tuesday in the form of the PMI figures and German business climate respectively. First of these, we will be watching out for the manufacturing and services PMI figures out of the majority of the major eurozone economies. Whilst important, the markets tend to move most on the manufacturing figures given the dependence on the industry within the major economies such as France, Italy and Germany. Furthermore, it is those economies which generally speaking are looked out for when the PMI figures are released. The most important of these is the German manufacturing PMI, which tends to be one of the core drivers of growth within the eurozone. Thus look out for the dominant sectors within the larger economies for market moving figures on Monday. Also be aware that with the French manufacturing sector approaching the 50 mark, (above which denotes a sector in expansion) any move above this level would likely draw significant attention in the markets.

On Tuesday, the German Ifo business climate survey is released, with the typical associations between German economic strength and the eurozone growth likely to come back to the fore. Of course, the markets are typically less sensitive to small movements in a figure such as this in comparison to more quantitative releases such as the GDP. However, this simply means that in order to see a significant shift in market price action, I would expect it would require a larger move in this figure such as the October release which jumped almost 2 points.

Asia & Oceania

A bit of a mixed week in Asia, where the release of very few figures are compensated by the fact that those announcements are well worth watching out for. In China, the release of the HSBC manufacturing PMI figure can be considered as one of the most important announcements globally for the week. This is due to the role it has had in the emerging markets sell-off and as an indicator of the slowdown seen within China in the recent months. The HSBC PMI is important as it reflects the health of the manufacturing sector for the small and medium sized businesses. It is these companies which tend to struggle most during a downturn given their lower capital reserves and access to credit. Thus a poor HSBC figure is likely to signify a continued deterioration in the sector and thus could lead to an element of contagion to the bigger businesses in China. Conversely, a rise in this figure could be a sign that the downturn is starting to pick back up. Markets estimates point towards a moderate rise from 48.5 to 48.7 when released on early Monday morning.

Finally, the release of the Japanese retail sales figure on Thursday is likely to gather substantial attention ahead of the sales tax, scheduled to go ahead on 1 April. This rise in tax is widely expected to have a notable impact upon the outlook of retail sales going forward, where strong sales are expected pre-imposition, followed by possible slowdown afterwards. Should we see a substantial slowdown, it is likely that the BoJ would consider bringing about an increase to the rate of asset purchases, which would be expected to greatly impact markets. Thus the strength of this figure both before and after imposition are key in understanding exactly where BoJ monetary policy is likely to move next.

 

[Alpari UK]

UK Opening Call – Monday 24th March 2014

Asian markets posted strong gains overnight as Copper prices fell drastically on rumours that we could well be looking at a round of stimulus hitting the Chinese economy. A preliminary measure of Chinese manufacturing showed the number weaken for the fifth consecutive month intensifying the growing fears that China will miss its growth forecast for the year. The Chinese PMI figure came in at 48.1 against an expected number of 48.8 and down on last month’s figure of 48.5. There have been growing fears that the Chinese bubble is teetering on the edge, and the discussion of stimulus to hit the economy seems an inevitable next step. The weaker the recent readings become the more likely some kind of action by the Peoples Bank of China. Plans for potential stimulus still seem sketchy but its seems the central bank will focus on liberalising interest rates for general bank deposits while loosening the states grip on the Yuan and giving more influence to normal market participants. As we said the plans are sketchy, but plans none the less.


Europe is likely to take its lead from the news of potential stimulus out of China and with the sweeping gains in Asia it may be surprising to see index futures pointing to a much weaker open across the board in Europe. It seems the markets are reacting more to the negativity of numbers rather than the potential cash injection. Today’s session however is looking a little light of any key data on the economic calendar. The theme of manufacturing data will continue on Monday however with the Euro area posting its PMI numbers. It’s no surprise that this numbers is likely to fall, when we see that the German equivalent is also expect to fall. Germany is of course the manufacturing powerhouse of the Eurozone and weakness in the German economy, no matter which part, leads to weakness within the Eurozone. ECB President Mario Draghi will be keeping a close eye as he has some tough decisions to make in order to get the economy moving again, as most of the major economic readings show poor growth in the area.

It’s likely to be a busy week for the UK as a number of huge numbers are set to be released. Tomorrow morning sees the release of the CPI inflation figure with the number expected to drop from 1.9% to 1.7%. This will be closely watched as fears of deflation grip the Eurozone and have started to worry officials in the US, Mark Carney will be hoping that we can stop the fall. This is not to say a reading of 1.7% is a bad number, but a continuation of the fall which seems a theme globally at the moment would be a cause for concern. As the week moves on retail sales readings and the GDP number will bring the UK economy into even more focus. These readings coming so close to last week’s UK Budget means that the numbers will be of even greater public and market interest.

So the start of the week will most definitely see markets take their lead from Asia as potential stimulus moves in China boost equity markets in Asia. However one area that still must not be ignored is the on-going crisis in Crimea. Russian troops have now overrun Crimea’s Feodosia naval base and with the threat growing day by day the west have now started to act with sanctions. The fears in Russia are that the sanctions are pushing the country close to recession with the US and Europe set to turn the screw even tighter. Analysts at state run VTB Capital say that the potential sanctions will see the economy contract for at least two months as the fears rattle the markets, curb investment and raise the cost of borrowing.

Ahead of the open in Europe we expect to see the FTSE open lower by 80 points with the German DAX lower by 97.

 

[Alpari UK]

US Opening Call – Monday 24th March 2014

US futures higher on reports of stimulus from PBOC

* US futures higher on reports of monetary stimulus from PBOC;
* Developements in Crimea weigh on European indices;
* G7 meeting to discuss sanctions, response so far weak;
* French PMIs overshadowed by poor German performance;
* Focus turns to US manufacturing and G7 announcement.

US futures are trading around a fifth of a percentage point higher on Monday, tracking gains made in Asia overnight, following reports of a monetary stimulus program from the People’s Bank of China in response to the slowdown this year. The S&P is currently seen opening 3 points higher, the Dow 22 points higher and the Nasdaq 7 points higher.

This positivity has not been reflected in Europe though, where indices are currently trading more than half a percentage point lower. Clearly traders in Europe are taking their cue from the ongoing crisis in Crimea, where Russian troops stormed three Ukrainian military bases over the weekend, including a naval base this morning. The G7 is meeting today to discuss further sanctions on Russia in response to its continued aggression and it appears traders are concerned about what impacts this could have on Europe.

We know the economy of the eurozone is fragile and many areas are only in the very early stages of recovery. If the sanctions back and forth that we’ve seen over the last week continues, it is eventually going to have an impact on the European economy as well as that of Russia. Traders are clearly very concerned about this which is why we’re continuing to see so much aversion to risk in these markets.

Germany may well be the biggest concern in all of this as it has been the engine of growth for the eurozone throughout the financial crisis. Around a third of oil and gas imports is believed to come from Russia so any sanctions from either side in relation to this could have a severely damaging effect. Of course, the Russian economy is heavily dependent on the oil and gas sector which makes the likelihood of sanctions here unlikely but it’s not impossible. What may be more of a concern is the other sections of the economy that could suffer as a result of sanctions and whether it is strong enough to withstand this.

So far, this is what appears to have prevented the EU from imposing stronger sanctions on Russia which is why it has been undeterred in its annexation of Crimea. It seems that either outcome is undesirable, either both sides continue with mild sanctions and the crisis drags out and goes on unresolved, or more severe sanctions are implemented which throw both economies into recession, which neither side want. The US is potentially therefore less exposed to the sanctions it imposes on Russia which is why it appears to be more willing to take more serious action, although it could be argued that even the US has been pretty weak until this point.

Also weighing on Europe this morning has been a batch of disappointing PMI readings, in particular the German and eurozone numbers, which missed expectations. The French figures were significantly improved but I guess this just highlights how much more important Germany is to the eurozone economy than any other country. Even with this improvement, the eurozone number fell in line with the German number.

US futures, like their Asian counterparts, are responding much more to the reports overnight that the PBOC is considering loosening monetary policy in order to stop the slowdown in the economy that has led many to call into question the ability of China to achieve its 7.5% growth target. We saw last year that the governments targeted fiscal stimulus program aided the recovery in the second half of the year, the reaction to these reports suggest that traders envisage the same thing happening if the PBOC takes similarly desperate measures.

The US session may be a little quieter on Monday, in terms of data, with the economic calendar looking pretty thin. The only notable release is the preliminary reading of the US manufacturing PMI for March which is expected to fall slightly to 56.5, from 57.1 last month. Given the improvement in the US data in the last month, expectations may be a little low here which could give us some upside surprise and further aid investor sentiment.

Aside from this, while the day may be looking a little quiet, I’m expecting plenty of activity in the markets as traders attempt to absorb all of this morning’s economic data and developments in Crimea, not to mention the potential sanctions from the G7.