Jens Nærvig Pedersen
Danske Bank A/S
Market movers today
The geopolitical situation in Ukraine will probably be the main focus after deadly clashes on Sunday in eastern Ukraine and the Ukrainian government’s announcement that it will move troops into eastern Ukraine to regain complete control. All eyes will be on a possible Russian reaction. EU foreign ministers will meet in Brussels today to discuss a response.
In the data calendar the main release is March retail sales in the US. We expect a solid weather-related rebound in retail sales driven by not least stronger auto sales. Euroarea industrial production for February will also be released and is expected to show a moderate improvement. As most euro-area countries have already released national production data, this is usually not a release with major surprises.
Q1 earning reports will be a major focus this week after the sharp correction in the US stock market last week. We kick off a very busy reporting week with CitiGroup reporting today.
Selected market news
The conflict between Russia and Ukraine moved to the eastern Ukraine city of Slovyansk over the weekend where Ukraine security forces battled pro-Russian activists, thereby adding to a further escalation of the crisis. Late Sunday Russia called for an emergency UN meeting on the conflict. The situation in eastern Europe is likely to be a key worry for the market and a further sell-off of Ukrainian and Russian assets seems probable. There has already been a reaction in the energy and grains market, where precautionary buying sent prices up this morning, due to Putin’s comments on the likelihood of a shutdown of gas exports from Russia to Ukraine.
A bunch of interesting comments from central bankers after an IMF meeting over the weekend. ECB President Mario Draghi hinted that a stronger euro may call for further monetary easing in order for ECB to meet its aim of price stability. That followed a similar comment from fellow executive board member Benoit Coeuré on Friday. Head of the Polish central bank, Marek Belka, was out saying that the central bank is preparing (not planning) for unconventional policies including purchases of assets in different classes and deputy head of the Russian central bank, Ksenia Yudaeva, said that the central bank will probably not revise its policies in response to further sanctions on the country from the West amid the conflict with Ukraine.
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