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The Ukraine crisis: Hotter than you think
There is a risk of the crisis in Ukraine escalating, however the markets aren't taking the situation very seriously. That's according to Saxo Bank's Head of FX Strategy, John Hardy. He says the situation's "hotter than you think". Sanctions could be imposed on Russia as early as Monday after people in Ukraine's Crimea region voted overwhelmingly to join Russia. The US and the EU consider the poll to be illegal.
John says normally he'd expect the dollar and the Japanese yen to be much stronger but we're not seeing any major moves. There's also a suggestion that Russia has perhaps sold billions of dollars of US treasuries in anticipation of any sanctions. It's not clear which country is behind the biggest one week drop of foreign central banks' custody holdings at the Fed. There are more details on that by the Telegraph's International Business Editor, Ambrose Evans-Pritchard, on Trading Floor here: https://beta.tradingfloor.com/posts/viewpoint-ambrose-evans-pritchard-1731221554
John Hardy also points to this week's FOMC meeting as a possibly significant 'event risk'. It's expected the Fed will taper its bond buying programme by another ten billion dollars.
02:14 minutes
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