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13 Mar 2014
EMEA EM Express: Markets closely watching situation in Ukraine ahead of Crimea vote
FXStreet (Łódź) - Concerns over Ukraine´s capacity for exports in the face of a possible escalation of the conflict with Russia, prices of wheat and corn surged for the third running day. Ukraine is the third largest exporter of corn and the sixth largest exporter of wheat, so grain traders observe the developments in the country closely, for signs of any disruptions in the shipments. Up until today no such problems have been noted.
Yesterday EU leaders outlined possible sanctions against Russia, including travel bans and asset freezes, which would be imposed if the referendum on Crimea was carried out against international opposition. German Chancellor Angela Merkel said that they would come into force on Monday if Russia still refused to negotiate.
In the afternoon US President Barack Obama met with Ukrainian PM Arseny Yatseniuk in the White House to discuss ways of handling the situation in Crimea peacefully. Yatseniuk expressed his readiness to hold talks with Moscow on “how to increase the rights of (the) autonomous republic of Crimea, starting with taxes and ending with other aspects like language issues."
Economic data
On Thursday, South Africa´s Statistics Head Office informed that on an annual basis Manufacturing Production rose by 2.5% in January, down from the 2.8% increase the previous month.
On Wednesday South Africa also published current account numbers for the fourth quarter of 2014. The year-on-year seasonally adjusted data was better than forecast showing a 5.1% GDP deficit, up from the 6.4% GDP gap in the previous quarter. Therefore, the current account defict for the entire 2013 stands now at 5.8% of GDP.
In the opinion of Dorothee Gasser from ING: “All in all the release is rather a positive, but it may be early stages to pin down South Africa for a sustained c/a improvement for 2014 following the 4Q13 release.”
“Trade dynamics remained unsupportive (import growth still outpacing exports) and the outlook for metal prices remain clouded by the Chinese landing scenario. South Africa external funding will in absolute terms remain large in the year ahead, inducing volatility risks still for the ZAR over the period.”
Meanwhile, according to data released on Thursday, Russia´s Central Bank reserves were seen at 494.60B on March 7 following 493.30B the week before.
Technicals
Russia´s stock market and the ruble are suffering under the weight of the Ukranian crisis. The Micex Index (INDEXCF) fell by 2.6% to 1,274.21 at the Moscow close on Wednesday, while the ruble dropped for the fourth day against the central bank’s dollar-euro basket. Meanwhile, USD/RUB closed at 36.43 on Wednesday.
The daily FXStreet Trend Index for USD/RUB was slightly bullish, with the OB/OS Index neutral. RSI was neutral at 71.3974 at the last close. Daily 2-StDev Volatility Bandwidth was expanding at 205 pips, with ATR (14) shrinking at 303 pips. The 1D 200 SMA is at 33.1891, while the 1D 20 EMA at 35.8931.
The USD/UAH closed at 9.28 and its daily FXStreet Trend Index was slightly bearish, with the OB/OS Index neutral. RSI was neutral at 52.6767.
Yesterday EU leaders outlined possible sanctions against Russia, including travel bans and asset freezes, which would be imposed if the referendum on Crimea was carried out against international opposition. German Chancellor Angela Merkel said that they would come into force on Monday if Russia still refused to negotiate.
In the afternoon US President Barack Obama met with Ukrainian PM Arseny Yatseniuk in the White House to discuss ways of handling the situation in Crimea peacefully. Yatseniuk expressed his readiness to hold talks with Moscow on “how to increase the rights of (the) autonomous republic of Crimea, starting with taxes and ending with other aspects like language issues."
Economic data
On Thursday, South Africa´s Statistics Head Office informed that on an annual basis Manufacturing Production rose by 2.5% in January, down from the 2.8% increase the previous month.
On Wednesday South Africa also published current account numbers for the fourth quarter of 2014. The year-on-year seasonally adjusted data was better than forecast showing a 5.1% GDP deficit, up from the 6.4% GDP gap in the previous quarter. Therefore, the current account defict for the entire 2013 stands now at 5.8% of GDP.
In the opinion of Dorothee Gasser from ING: “All in all the release is rather a positive, but it may be early stages to pin down South Africa for a sustained c/a improvement for 2014 following the 4Q13 release.”
“Trade dynamics remained unsupportive (import growth still outpacing exports) and the outlook for metal prices remain clouded by the Chinese landing scenario. South Africa external funding will in absolute terms remain large in the year ahead, inducing volatility risks still for the ZAR over the period.”
Meanwhile, according to data released on Thursday, Russia´s Central Bank reserves were seen at 494.60B on March 7 following 493.30B the week before.
Technicals
Russia´s stock market and the ruble are suffering under the weight of the Ukranian crisis. The Micex Index (INDEXCF) fell by 2.6% to 1,274.21 at the Moscow close on Wednesday, while the ruble dropped for the fourth day against the central bank’s dollar-euro basket. Meanwhile, USD/RUB closed at 36.43 on Wednesday.
The daily FXStreet Trend Index for USD/RUB was slightly bullish, with the OB/OS Index neutral. RSI was neutral at 71.3974 at the last close. Daily 2-StDev Volatility Bandwidth was expanding at 205 pips, with ATR (14) shrinking at 303 pips. The 1D 200 SMA is at 33.1891, while the 1D 20 EMA at 35.8931.
The USD/UAH closed at 9.28 and its daily FXStreet Trend Index was slightly bearish, with the OB/OS Index neutral. RSI was neutral at 52.6767.