Growing tensions over what may happen in the Ukraine following Sunday’s Crimea referendum on whether to join Russia have weighed heavily on trading through today’s European and North American trading sessions. Traders have turned increasingly defensive over the course of the day driving gold up near $20.00 per ounce to break out from a trading channel while other defensive plays like silver, JPY and CHF have also rallied. Big divergences in commodity trading today indicate political risk premiums related to Ukraine have clearly grown. While WTI crude oil fell 2.2% on a bigger than expected inventory build, Brent crude fell only 0.6%. Meanwhile, wheat soared 3.0% while soybeans fell 2.3%. Moving into today’s Asia Pacific session, focus has turned to more local matters with a number of major announcements that could move markets today. New Zealand kicked things off with the RBNZ raising its Official Cash Rate by 0.25% increase to 2.75% as had been widely expected. The central bank indicated that inflationary pressures are increasing and that additional rate increases remain possible to keep inflation contained to its 2% target. NZDUSD has rallied up into the $0.8500 to $0.8540 range on the news. Australian jobs are due today with the street looking for a rebound from recent weakness to confirm the improving results recently seen in other indicators. AUD has been weakening ahead of the news and in recent sessions after RBA Governor Stevens took steps to try and talk the Dollar down last week The third major event of the day is the release of China retail sales and industrial production for the first time in two months. Last weekend’s China numbers were soft and traders may be looking to these results for confirmation. China indices and China sensitive markets have been falling to start the week but the China A50 index and copper have been stabilizing near major lows heading into the news. These results may also indicate whether the PBOC may need to cut bank reserve requirements as has been rumoured lately. Markets may remain active right through the end of the week with US retail sales and jobless claims out tomorrow and more Asia Pacific data Friday, and political turmoil in Ukraine, Turkey and elsewhere remains a wild card. Economic News Significant announcements released overnight include: RBNZ interest rate decision 0.25% increase to 2.75% widely expected US crude oil inventories 6.1 mmbbls vs street 2.0 mmbbls US gasoline inventories (5.2 mmbbls) vs street (2.0 mmbbls) Spain consumer prices 0.1% vs street 0.0% Greece industrial production 1.1% vs previous 0.5% India industrial production .01% vs street (0.90%) India consumer prices 8.1% vs street 8.3% vs previous 8.8% Brazil inflation 5.68% vs street 5.64% Canada Teranet house prices 5.0% vs street 4.9% Upcoming significant announcements include: 10:50 am AEDT Japan machine orders street 18.9% 12:00 pm AEDT South Korea interest rate 2.50% no change expected 11:30 am AEDT Australia employment change street 15K vs previous (3K) 11:30 am AEDT Australia unemployment rate street 6.0% 11:30 am AEDT Australia full-time jobs street (7K) 11:30 am AEDT Australia part-time jobs street 3K 4:30 pm AEDT China retail sales street 13.5% 4:30 pm AEDT China industrial production street 9.5% 4:30 pm AEDT China fixed assets street 19.4% 7:45 am GMT France consumer prices street 1.0% vs previous 0.7% 8:00 am GMT Spain retail sales street (0.8%) 10:00 am GMT Greece unemployment rate previous 27.0% 8:00 am EDT Brazil retail sales street 4.8% 8:30 am EDT Canada new house prices street 1.3% 8:30 am EDT US retail sales street 0.2% 8:30 am EDT US jobless claims street 330K 10:30 am EDT US natural gas storage street (199 BCF)

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