Traders around the world continue to pull capital out of global stock markets as they move into more defensive stances ahead of Sunday’s referendum in Crimea on whether or not to join Russia. The result has the potential to take the crisis to the next stage with many countries indicating they won’t accept the result (unless it goes their way of course). The risk of sanctions from the US and EU, and the risk of counter-sanctions or military action from Russia mean that the situation could become more volatile with the potential for financial and trade disruptions. This has sent capital fleeing into traditional defensive havens with gold, silver, JPY and CHF surging once again. European indices like the DAX and IBEX have fallen faster than the FTSE and US indices today, reflecting their higher exposure to risk should the Ukraine situation worsen dramatically. On the other hand, EUR has outperformed GBP slightly as UK data came in mixed today. The crude oil sensitive CAD and NOK have been underperforming as crude prices somewhat surprisingly stay down following a retreat earlier in the week. Copper continues to stabilize near $3.00. Natural gas has bounced back but remains vulnerable with the end of winter approaching Overall, it looks like the risk of some disruption has already been priced in to markets. The big question now is: Have markets underreacted or overreacted to the situation? The answer could spark significant action and opportunities to kick off next week leading into the upcoming FOMC meeting. Economic News Economic reports released overnight and this morning include: US producer prices street 1.2% Germany consumer prices 1.2% as expected UK trade balance (£2.5B) vs street (£2.2B) UK construction output 5.4% vs street 5.2% NZ business PMI 56.2 same as previous Singapore unemployment rate 1.8% same as previous Singapore retail sales 0.1% vs street (3.7%) Singapore ex auto 9.2% vs street 2.6% Japan industrial production 10.3% vs previous 10.6% Economic reports due later today include: 9:55 am EDT U of Michigan confidence street 82.0


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