Archive - Mar 18, 2014 - Story

• Lost Jet’s Path Seen as Altered via Computer (NYT)
• Fed Links Low Rates to “Persistent Headwinds” in Economy (Hilsenrath)
• Top German Court Clears Euro-Zone Bailout Fund (WSJ)
• U.S., EU set sanctions as Putin recognizes Crimea "sovereignty" (Reuters)
• Indian wealth effect: Sensex, Nifty hit life highs as domestic-focused firms rally (Reuters)
• China bond default has positive effect on local government groups (FT) - unless it's negative
• Russia tensions  risk higher gas prices (FT)
• China Home-Price Growth Slows in Big Cities on Tight Credit (BBG)
• ECB's Weidmann says German surpluses "here to stay" (Reuters)
• Microsoft Office for iPad (AAPL) to be introduced this month (The Verge)

Today's prime time geopolitical risk event is Putin's speech to a joint session of parliament, in which he will address the Crimean crisis. No major surprises are likely, with mentions of retaliatory sanctions and the formal annexation of Crimea expected to be the main talking points, although it is the nuances and the phrasing that threaten to pull the USDJPY lower potentially into the double digit territory at which point all bets are off, if only for the Nikkei and the future of Abenomics. Watch Putin's speech live below.

Has the market done it again? Two weeks ago, Putin's first speech of the Ukraine conflict was taken by the USDJPY algos - which seemingly need to take a remedial class in Real Politik - as a conciliatory step, and words like "blinking" at the West were used when describing Putin, leading to a market surge. Promptly thereafter Russia seized Crimea and is now on the verge of formally annexing it. Over the weekend, we had the exact same misreading of the situation, when the Crimean referendum, whose purpose is to give Russia the green light to enter the country, was actually misinterpreted as a risk on event, not realizing that all the Russian apparatus needed to get a green light for further incursions into Ukraine or other neighboring countries was just the market surge the algos orchestrated. Anyway, yesterday's risk on, zero volume euphoria has been tapered overnight, with the USDJPY sliding from nearly 102.00 to just above 101.30 dragging futures with it, in advance of Putin's speech to parliament, in which he is expected to provide clarity on the Russian response to US sanctions, as well as formulate the nation's further strategy vis-a-vis Crimea and the Ukraine.