Tensions between Russia and Ukraine have slightly eased

Tuesday, March 04, 2014

It seems that the political tensions between Ukraine and Russia have eased after the Russian President Vladimir Putin ordered troops engaged in exercises this week to return to base. There was a positive reaction in equities and commodity markets following the announcement.  

Asian equity markets rebounded and ended higher with the Nikkei and Hang Seng indices gaining 0.47% and 0.70%, respectively. European equity markets have also rebounded strongly in early trading this morning, posting strong gains. The release of the UK Markit/CIPS PMI and Eurozone’s Producer Prices will provide further momentum to the market.

 

Brent crude surged above $111 per barrel on Monday to record its highest level this year so far as the political uncertainty in Ukraine raised concerns of a possible energy disruption to Europe. However, this morning Brent futures have reversed and slid lower as tensions have been alleviated.

LME copper found immediate support around the 6950 level and ended at 6968 on Monday, holding near its 3-month low. The on-going uncertainty in Ukraine as well as the weaker Chinese manufacturing PMI data weighed on market sentiment, raising renewed concerns regarding a possible slowdown of copper demand in the short-term.

Gold continues to trade near $1350, its highest level in four months as the political tensions have prompted safe-haven buying with investors staying away from high risk-assets like equities moving into precious metals.  

Brent Futures Daily Chart

 COJ4 Comdty (BRENT CRUDE FUTR  A 2014-03-04 08-55-02

ICE Coffee rallies strongly toward 200 area

KCK4 Comdty (COFFEE 'C' FUTURE M 2014-03-04 08-55-57

LME Copper consolidates near 3-month low

LMCADS03 Comdty (LME COPPER    3 2014-03-04 08-53-52

Events for today:

 

0930

UK

Feb

Markit/CIPS

1000

EZ

Jan

PPI

1500

US

Mar

IBD Sentiment

1500

US

Mar

ISM Manufacturing

All times UK Local Time

Economic Market Calendar

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