No Lasting Impact on Markets from Crimea Referendum Outcome

Ilya Spivak, Currency Analyst at DailyFX, comments:

Markets seem to be shrugging off initial risk following the weekend’s referendum in Crimea where over 90 percent of respondents opted of the semi-autonomous region’s secession from the Ukraine and annexation to Russia. While an upsetting of the geopolitical status quo is typically treated as risk-negative by the markets because of the accompanying uncertainty, the referendum outcome was widely expected and so did not yield a sustained response from investors. Monitoring follow-on theatrics will be important in gauging further market-moving potential. The Australian Dollar initially fell while safe-haven Yen rallied at the open of the trading week but those moves been fully reversed ahead of the opening bell in Europe.

“The final revision of February’s Eurozone CPI data headlines the economic calendar. Expectations suggest flash estimates putting the headline year-on-year inflation rate at 0.8 percent will be confirmed. A revision downward may sting the Euro amid speculation the ECB will be forced to expand stimulus efforts to counter persisting disinflation. An upgrade may produce the opposite effect, but follow-through is likely to be limited: ECB standstill represents the established status-quo and data arguing for more of the same is unlikely to materially bolster the single currency.”


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