- Πτωτικό άνοιγμα αναμένεται στις ευρωαγορές μετά το δημοψήφισμα στην Κριμαία
- Επαναπατρισμός ρωσικών κεφαλαίων από τράπεζες και επιχειρήσεις
- Το ισχυρό ευρώ ανησυχεί ολοένα και περισσότερο την ΕΚΤ
- Αναμένονται με ενδιαφέρον τα στοιχεία για τον πληθωρισμό στην ευρωζώνη
Europe set to open lower after Crimea vote.
By Michael Hewson (Chief Market Analyst at CMC Markets UK)
After last week’s sharp falls on global stock markets the focus this week will remain on events in the Crimea as unsurprisingly the large majority of Crimea’s population voted in favour of rejoining Russia. This is likely to result in a request by the Crimean government for Russia to annex the region, which could present President Putin with a bit of a financial or sanctions problem if he decides to accept the request.
Given that US and EU leaders do not recognise the legitimacy of the weekend referendum any moves by President Putin to act on this request are likely to result in a slippery slope towards some form of sanctions, from both the US and the EU.
The effects have already started to be felt in financial markets with reports of large scale repatriation of assets by Russian banks and companies as they front run any prospective action.
It also raises the prospect of unrest elsewhere in Ukraine from Russian speaking agitators wanting their own say in self-government with the next likely flash point expected to be in eastern Ukraine, as both Russian and Ukrainian troops mobilised troops near the border over the weekend.
With reports of violence already breaking out in Donetsk and Kharkiv the prospect of a Russian move on Ukraine’s eastern border is rising by the day, and this is likely to keep financial markets on edge for some time to come.
While the situation in Ukraine continues to unfold and rattle stock markets around the world the latest inflation numbers from Europe are set to be pored over once again especially in light of ECB President Mario Draghi’s comments last week about the level of the euro.
This verbal aside by the ECB President was all the more instructive given that on any number of previous occasions he has always stated that the exchange rate was not a policy target.
Last week’s comments were the first indication that the ECB was starting to become a little concerned that the high value of the euro was affecting its mandate on price stability. His comments that the exchange rate was becoming “increasingly relevant” were seen as a sign that any significant further gains could signal a policy response.
Today’s final EU inflation numbers could well offer clues to the timing of such a move, if they differ markedly from the readings last seen of 0.8% on CPI and core prices of 1% for February.
In the US the latest Empire manufacturing survey for March is expected to show an improvement from February’s disappointing 4.48, with a rise to 6.25, while February industrial production is expected rise 0.2%, up from the decline seen in January of 0.3%.
EURUSD – the euro stalled out at 1.3970 last week before retreating sharply but while it remains above the 1.3810 level then a move towards 1.4000 cannot be ruled out.
The 1.4000 level remains a key psychological barrier to a move towards 1.4200, while a move back below 1.3810, could well retarget a move back towards trend line support at 1.3765, from the February lows.
GBPUSD – while the pound is able to hold above the 1.6570 level then a retest of the February highs at 1.6820 cannot be ruled out. A concerted break below 1.6570 could well see further losses towards 1.6480 and even 1.6300.
We need to get back above the highs last month at 1.6820 to suggest a stronger move towards 1.7000. Only a close above 1.7000 could have huge significance in the coming weeks for the future direction of the pound.
EURGBP – last week’s break above 0.8350 to the highest levels this year could well be the first sign of a potential double bottom reversal and a move towards the 200 day MA at 0.8430. Support now comes in at the 0.8320 level and below that in the 0.8270/80 area.
USDJPY – last weeks close below 101.40 brings the February lows into focus at the 100.70/80 level. The 200 day MA is also a key level at 100.30. We need a move back through 102.70/80 to stabilise and argue for a move back towards 103.30.
Equity market calls
FTSE100 is expected to open 3 points lower at 6,526
DAX is expected to open 18 points lower at 9,038
CAC40 is expected to open 4 points lower at 4,212
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