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Crimea’s parliament votes to secede from Ukraine and become a part of Russia. There will be a region-wide referendum in Crimea, which is heavily ethnically Russian, on March 16. While tensions between the two countries have cooled since the beginning of the week, Russian troops without insignia control Crimea and surround Ukrainian military facilities despite pressure from the international community to stop the incursion.
Meanwhile, Congress will vote on sanctions against Russia. The House will vote on a measure to grant $US1 billion in loan guarantees for Ukraine, and Congressional Republicans are also pushing for a strong condemnation of Russia. “The House Foreign Affairs Committee is set to consider a non-binding resolution that would condemn Russian actions, call for sanctions on that country’s officials, banks and other state agencies, and urge members of the G-8 to consider expelling Russia from the group,” Bloomberg reports.
The ECB releases its decision on interest rates at 7:45 a.m. ET. While the consensus estimate is for no change, “Economists at Citi, Morgan Stanley, BNP Paribas, Crédit Agricole, Credit Suisse, and a few other shops think the ECB will pull the trigger on Thursday, announcing a cut to its benchmark refinancing rate — which currently stands at 0.25% — by either 10 or 15 basis points,” reported Business Insider’s Matthew Boesler. Mario Draghi’s monthly press conference will follow the announcement. Meanwhile, the Bank of England kept interest rate unchanged at 0.50% and asset purchases at £375 billion, in line with economist expectations.
Initial jobless claims come out at 8:30 a.m. Economists expect claims fell to 338,000 from 348,000 a week ago. “Initial jobless claims likely fell after an unexpected rise,” wrote Citi’s Peter D’Antonio. “The four-week moving average probably stayed in the prevailing 330K to 340K range.”
Then at 10:00 a.m., we’ll get factory orders. Economists are looking for a 0.5% dip in January. “Durable goods orders fell 1.0%, with all the weakness accounted for by a pullback in the volatile aircraft category, and we look for a small gain in nondurable goods prices, with a pullback in petroleum product prices a drag on nominal shipments,” wrote Morgan Stanley’s Ted Wieseman. “The inventory/sales ratio has been quite steady in the manufacturing sector in the past few years and should show a bit of upside in January but stay within recent ranges.”
Global markets were higher in overnight trading. In Asia, Japan’s Nikkei jumped 1.59% and Korea’s KOSPI climbed 0.22%. Markets across Europe were in the green, and U.S. futures pointed to a positive open.
China eases back on the 7.5% growth goal. China’s finance minister Lou Jiwei said that the government’s most important goal was to create jobs, and that it’s fine for China to slightly miss its lofty 7.5% economic growth target as long as the labour market is healthy. “Let’s say for instance, this year’s economic growth is not 7.5 per cent, but 7.3 per cent or 7.2 per cent. Does this count as around 7.5 per cent? Yes, it counts,” he said.
IBM workers in China go on strike. More than 1,000 employees went on strike at an IBM factory in southeastern China. IBM is set to sell its Chinese computer service business, which includes the factory, to Lenovo, and the strikers are pushing for better wages and conditions. The demonstration represents a growth in worker activism in China lately.
Costco’s profit falls 15%. The discount club reported earnings this morning, posting a profit of $US463 million ($1.05 a share), compared with $US547 million ($1.24 a share) a year earlier. Analysts were expecting EPS of $US1.17.
Global food prices spike in February. Food prices had their sharpest climb since mid-2012 due to higher commodity prices, Reuters reports. The United Nations’ Food and Agriculture Organisation’s price index — which looks at monthly changes in dairy, meat, sugar, and other commodities — came in at 208.1 points in February, up 5.2 points from January.
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