Ukraine & Russia tensions still the main story
City Index March 17, 2014 1:31 PM
<p>A mixed start to the week with more Ukraine and Russia tensions still building after the people of Crimea voted to leave the Ukraine and […]</p>
A mixed start to the week with more Ukraine and Russia tensions still building after the people of Crimea voted to leave the Ukraine and be part of Russia.
The next installment of this will be how the West reacts after announcing last week that a referendum would be illegal and they would impose sanctions against Russia if it went ahead. So, for now, this is the main story dominating this week.
In Asia, the PBOC announced that it will widen the trading band of its onshore CNY to 2% from the 1% from today; it reacted by falling against the USD by 190 points.
AUD was a big mover overnight after being pushed lower on a risk-off sentiment from Ukraine issues and the worrying signs that China is slowing down. But, it got a leg higher today after Westpac dropped the RBA rate cut call on better employment data.
Today, the EU CPI is released – expecting a 0.8% m/m and 1.0% y/y, which is a slight improvement from last.
So, with the talk of Draghi and no threat of deflation, the surprise to the market here is a weak reading and could bring back the negative rates talk.
In the US, the Empire State Manufacturing – due to be released at 6.6 from previous 4.5 – should give the USD some added strength, with the USD in control at the moment as the World awaits the US and EU sanctions on Russia.
Supports 1.3840 1.3785 1.3745 | Resistance 1.3930 1.3965 1.3980
Supports 101.20 100.75 100.35 | Resistance 101.75 102.00 102.20
Supports 1.6605 1.6580 1.6565 | Resistance 1.6670 1.6720 1.6760
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