Markets are rather steady as the week starts. Asian equities are mildly lower but losses are so far very limited. Major currency pairs are staying in tight range. In Crimea, the chief electoral official Mikhail Malyshev was quoted in media saying that over 95% of Crimeans voted in favor of leaving Ukraine and annexation by Russia after three-quarters of votes were counted. And he noted that the 83% turnout was a high figure given the boycott on the vote. Ukraine and Russia have agreed on a truce in Crimea until March 21. Meanwhile, US and European officials have also voiced out that military action is unlikely over Crimea.
Meanwhile, US and European leaders criticized that the Crimea referendum was against Ukraine's constitution and was illegal. The leaders are expected to unveil coordinated sanctions against Moscow today. That would include travel ban and asset freezes on some Russian officials but it's believed that wouldn't include Russian President Vladimir Putin. There would also be additional measures to be decided as EU leaders meet for a summit on March 20.
While the situation regarding Crimea will be closely watched, there are other events that are worth much attention too. Two central banks will meet this week, Fed and SNB. Fed is expected to continue with measured tapering and reduce the size of monthly asset purchase by another USD 10b to USD 55b. And the reduction would be evenly split between treasuries and MBS. Fed will also release updated economic projections. A main focus is whether Fed would update the forward guidance and move from a quantitative threshold of 6.5% unemployment to something qualitative. No change is expected from SNB and the central would reiterate the commitment to the EUR/CHF 1.2 floor. Meanwhile, RBA and BoE will also release meeting minutes. Here are highlights of this week's Calendar:
- Monday: Eurozone CPI, US empire state manufacturing, TIC capital flow, industrial production, NAHB housing index
- Tuesday: RBA minutes; German ZEW; US CPI, new residential construction
- Wednesday: BoE minutes, UK job, annual budget; FOMC rate decision
- Thursday: New Zealand GDP; SNB rate decision; US jobless claims, existing home sales; Philly Fed survey
- Friday: Canada CPI, retail sales.