Wall street staged a strong relief rebound overnight as traders anticipated that the worst of the Crimea is yet to come. The Dow closed 181.55 pts, or 1.13% higher at 16247.22 while S&P 500 closed 17.7 pts, or 0.96% higher at 1858.83. Treasury yields also recovered with 30 year yield once again defended 3.565 support to close at 3.630. The 10 year yield also recovered ahead of recent support at 2.579 and closed at 2.699. Dollar index, though, stay pressured and is trading below 79.4 for the moment. In the currency markets, yen was mildly lower as risk sentiments improved but overall, yen crosses stayed weak. Dollar was bounded in ranges against other major currencies.
An overwhelming majority of Crimeans, 97%, voted to join Russia in a controversial referendum over the weekend. Crimea's parliament official declared the region an independent state while Russia president Putin also signed a decree recognizing Crimea as a "sovereign and independent country". But such referendum was seen as illegal to the West, which triggered sanctions to Russia from US and EU.
US president Obama announced sanctions against Russia "to isolate Russia for its actions, and to reassure our allies and partners" of American support. It targeted seven Russian and four Ukrainian officials and include asset freezes and travel bans. EU separately announced sanctions of 21 individuals. Both lists have just four names in common, two top Crimeans and two Russians.
In Japan, prime minister Abe's advisor Hamada, a retired Yale University professor, said that BoJ should add stimulus as soon as May if the planned sales tax hike shows sign of hurting the economy. And warned that waiting for the June quarter GDP to act would be too late. Meanwhile, Hamada also said that BoJ could even double its annual pace of bond purchase to JPY 100T to give free stimulus to the economy.
In Australia, RBA meeting minutes reiterated that the central bank will keep rates on hold for a period of time. The minutes noted "timely indicators were consistent with some improvement in economic conditions over recent months." And, "the decline in the exchange rate seen to date would assist in achieving balanced growth in the economy."
Looking ahead, German ZEW will be the main focus in European session where Eurozone will also release trade balance. US will release CPI, housing starts and building permits later today.