A Malaysian airline crashed 50km from the Russian-Ukraine

Market movers today

Another light data calendar with the US University of Michigan Confidence indicator as the highlight. The consensus expectation is for a reading of 83, thereby confirming the recent uptick in consumer confidence.

Bundesbank’s President Weidmann is scheduled to speak in Madrid. Last weekend he said that interest rates were too low for Germany taken in isolation and hinted that Bundesbank would likely resist further ECB action beyond the current TLTROs. We expect him to stick to this message today.

Selected market news

A Malaysian airline crashed 50km from the Russian-Ukraine border in eastern Ukraine yesterday with all 298 people onboard reported dead. Malaysia Airlines said it lost contact with Flight MH17 flying from Amsterdam to Kuala Lumpur while it was over an area of eastern Ukraine, an area contested by pro-Russian separatists and Ukrainian forces. Early casualty figures from the airline include 154 Dutch, 27 Australians, 23 Malaysians, 11 Indonesians and six Britons, and the nationalities of 47 people remain unknown at this point.

There is great uncertainty surrounding the circumstances of the crash but Kiev, the pro- Russian separatists in eastern Ukraine and Russia have denied involvement in the crash, which came just a day after the US levied up the list of sanctions against Russia.

US and Ukrainian officials said they believed the plane had been brought down by a missile, as Ukrainian President Petro Poroshenko said it was an ‘act of terrorism’ and US Vice President Joe Biden said the plane crash was ‘not an accident’.

According to Reuters, the UN Security Council will hold an emergency meeting today, mulling a draft statement calling for ‘a full, thorough and independent international investigation’ into the MH17 crash.

The Malaysian air crash amplifies a move to safer assets yesterday with yields on 10Y US Treasuries falling to a seven-week low of 2.44% and both the Dow Jones and S&P 500 closed around 1% down. The ‘risk off’ sentiment is further reflected in the Asian stock markets this morning with declines of 0.5-1%.

FOMC member Bullard (non-voter) said yesterday that 'if macroeconomic conditions continue to improve at the current pace, the normalisation process may need to begin sooner rather than later.' He thereby repeats a main point from the Yellen testimony from earlier this week, although his preference for a Q1 15 hike is significantly earlier than both Yellen and the FOMC median thinks.

Scandi markets

No key data releases in Scandinavia today.