• EM fears dominate a market with little economic data – Merkel says Russia is annexing Crimea and must change or risk more sanctions; EU to discuss further sanctions on 17 March, day after Crimea referendum – Rumors (unconfirmed) that another Chinese solar company will default; copper falls further, oil as well – Currencies: AUD dragged down by China fears, JPY boosted by safe-haven flows. Other G10 currencies little changed. – All EM currencies that we track were lower, led by ZAR and TRY • These problems aren’t going away – Ukraine tensions to increase ahead of referendum – Unwind of Chinese credit bubble is just beginning – AUD is vulnerable; SNB intervention means JPY likely to respond better to safe-haven flows than CHF • Today: Eurozone: Eurozone industrial production for Jan – US: Weekly MBA mortgage applications – New Zealand: Overnight, RBNZ meets; widely expected to hike rates 25 bps, so the response depends on what Gov. Wheeler has to say following the meeting. Market is pricing in at least one more hike this year.
Posted on: Wed, 12 Mar 2014 09:04:00 +0000
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