Russian Central Bank Opens Fire With Rate Hike

As expected, geopolitical Russian-Ukrainian tensions are weighing on market sentiment. However, it’s rhetoric that is keeping everything in modest check for the time being, despite the situation escalating progressively throughout the weekend. Behind the scenes, talking is taking some of the capital markets’ nervous edge off Russian President Vladimir Putin’s “bully boy” tactics thus far. American President Barack Obama held extended conversations with the Russian leader over the weekend, whilst also securing commitment from the Group of Seven for a joint condemnation of Russia’s violation of Ukrainian territory. Putin obviously needs to defend his actions and has held talks with Europe, specifically German Chancellor Angela Merkel, to defend his intentions regarding the troop movements and agreeing to an Organization for Security and Cooperation-led (OSCE) “fact-finding” mission. Throughout all of this, it’s only natural that the USD, CHF, and JPY are in high demand. Other safe haven flows have given a boost to the bund, U.K. gilt, and U.S. Treasury futures, as well as gold – however, the appetite for risk aversion remains cautious for the moment.

http://www.forbes.com/sites/deanpopplewell/2014/03/03/russian-central-bank-opens-fire-with-rate-hike/