Yesterday markets tanked everywhere.
Today they’re rallying everywhere.
The most likely story: News that Russia has ordered troops bordering Ukraine to halt their exercises and return to base. This doesn’t apply to the troops occupying Crimea, but it is being taken as a hint that things are cooling a little bit.
Russian stocks, which got annihilated yesterday, are up 4%. The ruble is rising.
Germany is up 1%. Italy is up 1.5%. S&P futures are up 0.75%.
Kit Juckes of SocGen characterises the day thusly:
Good morning. Tensions in the Ukraine and Crimea have (temporarily) been eased. Russian troops have finished their ‘military exercise’ and financial market tension is melting away. And no, of course it’s not ‘all over’. The economic fallout, notably in Russia, will be significant and building political stability in the Ukraine remains a huge challenge. But financial markets are short-sighted animals and everything is calmer. Even the (very) overvalued Rouble is stronger today. And so, risk is a lot less ‘off’ than it was, EMFX is rallying across the broad, equity markets are up, Bund yields are higher, etc. In G10 FX, this means that USD/JPY has bounced back from 101, EUR/USD is edging higher again, and volatility is fading. with US employment data t the end of the week and ECB/MPC still to come, today’ is an in-between sort of a day, ideally suited to getting home in time to eat pancakes with the children….
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