Comments from Russian President Putin on Crimea and the situation in Ukraine have had a dramatic effect on trading in North American and Europe today. While pushing toward absorbing Crimea into Russia in the face of threats from elsewhere, he indicated that he has no designs on Ukraine beyond Crimea (no immediate plans anyway). Meanwhile despite tough talk from the EU and US, sanctions to date have amounted to less than a slap on the wrist and there don’t appear to be any immediate plans for more. As such, the street appears to be thinking that the Ukraine situation looks to be contained at the moment, although it could easily flare up again in future. This speech sparked a big rally to start the day in US stocks. Following a typical midday lull, stocks have resumed their advance heading into the US close sending positive momentum into the Asia Pacific morning. Through the day, capital has been flowing out of defensive plays like gold and silver and back into risk markets with resource currencies like NZD and AUD outperforming. In commodities today, WTI crude is outperforming Brent crude as the Ukraine risk premium unwinds, although another rally in wheat suggests it isn't completely gone. GBP continues to underperform other majors as the street digests today's MPC membership changes at the Bank of England. CAD has given back some of its early gains after Bank of Canada Governor Poloz hinted at a soft Q1 for Canada on weather disruptions. Late in the day, Canadian Finance Minister Flaherty resigned from politics. This is not a total surprise to the market as his departure had been rumoured for some time as he has had health issues. No replacement has been named as of yet, but the successor could have an impact if they change tone or direction as has happened since Governor Poloz took over from Governor Carney at the Bank of Canada last summer. Today’s focus in Asia Pacific shifts from China to Japan with trade data due. Traders may note that even though recent Chinese data has disappointed, the China A and Hong Kong markets have started to stabilize along with copper, suggesting that markets may have already priced in a softer economy. CNH continues to weaken as the currency adjusts to the PBOC’s new 2% trading band. The biggest events over the next 24 hours are elsewhere; specifically the US tapering decision and the UK employment report. A steady stream of positive data points out of the US, including today’s housing data suggests that the Fed’s program of steady tapering at each meeting this year is likely to continue. Chair Yellen’s first statement and post-meeting press conference may attract some attention from the street looking for indications of what she is focusing on and her plans for the central bank. Corporate News Adobe $0.30 vs street $0.25, quides next Q to $0.26-$0.32 vs street $0.26 Oracle $0.68 vs street $0.70 Economic News Significant announcements released overnight include: US consumer prices 1.1% vs street 1.2% vs previous 1.6% US housing starts 907K vs street 910K US building permits 1,018K vs street 960K Canada manufacturing sales 1.5% vs street 0.6% Germany ZEW current situation 41.3 vs street 52.0 vs previous 50.0 Germany ZEW expectations 46.6 vs street 52.0 vs previous 55.7 Upcoming significant announcements include: 10:30 am AEDT Australia leading index previous (0.2%) 10:50 am AEDT Japan trade balance street (¥600B) 10:50 am AEDT Japan exports street 12.5% 10:50 am AEDT Japan imports street 7.2% 4:00 pm AEDT Japan leading indicator street 112.2 9:30 am GMT UK jobless claims street (25K) vs previous (27K) 9:30 am GMT UK unemployment rate street 7.2% 9:30 am GMT UK 3M employment change street 110K vs previous 193K 9:30 am GMT UK Bank of England minutes 12:30 pm GMT UK budget speech 10:30 am EDT US crude oil inventories street 2.7 mmbbls 10:30 am EDT US gasoline inventories street (1.5 mmbbls ) 2:00 pm EDT US QE3 decision $10B taper to $55B expected 2:00 pm EDT US interest rate decision 0.25% no change expected 2:30 pm EDT US FOMC Chair Yellen press conference


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