Yesterday the US stock market took a huge hit, this morning the selling continues in all global markets. Markets are very concerned about this weekend’s vote in Crimea on a referendum to secede from the Ukraine and join Russia. Russian troops still on the border. China’s economic slowing is also roiling global markets; the combination of the two concerns sent interest rates lower yesterday on safety moves and hedging against possible continued selling of stocks. The uncertainty of China and Russia has stepped up market volatility this week and will likely continue next week into the FOMC meeting conclusion on Wednesday. Secretary of State Kerry told a Senate panel in Washington yesterday that the U.S. and Europe will take “very serious” steps the day after the Crimea vote “if there is no sign” of a resolution to the crisis. Russian President Vladimir Putin is preparing to “invade eastern Ukraine,” Estonian Defense Minister Urmas Reinsalu said by e-mail today. Likely neither of the two scenarios will occur rapidly, if at all. Kerry will meet with his Russian counterpart today, hoping to ease the situation in Crimea as the clock ticks down to a referendum From a fundamental perspective, if the situation with Russia leads to an economic slowing and China’s economy continues to show weakness the rate markets could decline a lot further. Looking to next week, the FOMC meeting on Tuesday and Wednesday with the Fed widely expected to taper another $10B taking the total tapering to -$30B from $85B a month.
Posted on: Fri, 14 Mar 2014 15:47:52 +0000
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