A rather disappointing session for global risk assets as uncertainty surrounding Ukraine dominated headlines, prompting a retreat from most major equity indices early on before regaining some ground in the afternoon. European equity indices spent most of the session under pressure with London’s blue chip index trading as much as 0.95% lower before a late stage rally pushed it to close 0.16% higher. Continental European indices were also subdued throughout the day with the CAC just managing to close in positive territory while the DAX slipped 0.76% lower on heightened tensions in Ukraine.
Three month LME copper prices faced further selling pressure today before recovering much of the day’s losses towards the end of the session as prices closed flat, with the recent bear run erasing most of the gains built up over the first half of the month. Intraday prices dropped below $7,000/tonne for the first time since early December while activity across the other base metals remained subdued throughout the session before a late recovery towards the close. Three month tin futures on the LME rallied higher for the fifth consecutive session on an Indonesian agreement to set a minimum export price mechanism. Tin prices have gained 6.7% since the start of the month, holding firm above $23,550 at today’s close.
Demand for haven currencies pushed the currency to a 10 month high against the euro towards 0.8226 as emerging market risk aversion crept back into the market. Continued unrest in Ukraine has seen the UAH plummet almost exponentially against the dollar as its central bank struggles to stabilise the currency and foreign reserves drop. The currency reached a peak of 11.3075 against the dollar today compared to the start of the year when it was trading around 8.24.
Wall Street got off to a shaky start despite better than expected durable goods orders which declined 1% m/m in January, slightly less than the 1.7% median decline expected by economists surveyed by Bloomberg. Durable goods orders excluding transportation grew by 1.1% m/m in January from a contraction of 1.6% the previous month which took a while to sink in as investors were distracted by the unfolding situation in Ukraine. At the time of writing both the S&P 500 and DJIA were trading 0.2% higher.