EUR Strengthens On The Back Of Sanctions
Global markets have reacted with calm to Crimea’s vote in favour of joining Russia in yesterday’s referendum, and are currently awaiting further developments. More sanctions could be imposed on Russia in the upcoming days, if it continues to act in such a way in the Crimea.
Europe is heavily dependent on Russia’s gas supplies and Putin could decide to retaliate by halting the supplies which would mainly affect Eastern and Central European countries.However, current European energy reserves are relatively high and demand is low so the situation isn’t too dire for Europe. News of the sanctions improved risk appetite in the market and saw Euro continue to rise on its way to multi-year highs against the US Dollar. This move was also aided by poor NY Fed manufacturing data which came in below expectations.
News out today is a follows;Italy trade balance, German ZEW current situation, ZEW expectation, EU ZEW expectation, U.S. CPI, housing starts, building permit, Redbook retail sales, long-term TIC flows.