Financial markets reopen today

Financial markets reopen today after the long Easter weekend and it seems that traders will have the opportunity to ease back into markets as data looks light on Tuesday. However as the week moves on the economic calendar will get a little busier and traders will finally have something to get their teeth into. However it is not just the economic calendar that will generate the news flow, as the on-going crisis between Russia and Ukraine remains the story that investors must keep one eye on to protect themselves from any kind of unexpected market moves.

Today’s session is likely to be a fairly quiet one as traders return from the long weekend. The economic calendar shows that construction output and consumer confidence out of the Eurozone are the only numbers of any note. The consumer confidence reading will be an interesting one as many people will be looking to see what kind of impact potential sanctions on Russia has on confidence in the Eurozone. Last week’s German and Euro area ZEW survey showed a mixed message when it came to this particular issue and with the IFO reading coming later in the week the consumer confidence number may well give us a sneak preview of what to expect. The possibility of sanctions being imposed on Russia if they do not cooperate is causing all sorts of problems for financial markets, but the threat to Russia from the west has so far been a pretty limp one. President Vladimir Putin has already expressed his desire to retaliate to sanctions imposed by the west with sanctions of his own, and any such move could have huge repercussions for Europe and especially Germany. Last week showed certain European companies lobbying governments trying to make sure no sanctions were imposed on Russia. The only place that seems to have a stomach for the fight at the moment is the US, with the White House have thought to have already spoken to a number of major corporations preparing them for the inevitability of sanctions against Russia. However the annual trade between Russia and the US is only worth around $40 billion per year, a drop in the ocean compared to trade between Russia and Germany. It does seem that most involved in the crisis could do without it, Europe has the most unstable economic recovery so therefore any sanctions could be crippling, Ukraine, with elections fast approaching would of course rather a peaceful resolution and contrary to popular belief the Russians can’t afford it either. That leaves the US, yet again acting as the knight in shining armour looking to save the day, but with the least to lose in the whole situation, it’s no surprise.

As the week moves on we will get more data that is likely to get the markets moving again with the likes of the MPC meeting minutes, PMI readings from the Eurozone and UK retail sales. However truth be told, in terms of the economic calendar the markets may not really ever get going this week, but with earnings season in the US still in full flow and worries over tech stocks still causing investors sleepless nights, there is likely to remain that hint of volatility and with everyone returning from their spring breaks we could well see volume increase as well.

Ahead of the open we expect to see the FTSE open higher by 26 points with the German DAX higher by 56 points.