Monday, March 03, 2014

Today's Headlines

Bloomberg:
  • Ukraine Crisis Intensifies as Russia Denies Navy Ultimatum Claim. Ukraine said Russia’s navy ordered two of its ships in Crimea to surrender amid the worst standoff between the West and Russia since the end of the Cold War. A Russian Defense Ministry official denied the claim. Russia’s Black Sea fleet gave the ships, located near the port of Sevastopol, until 5 a.m. to give up weapons and capitulate, Oleksiy Kirchkov, deputy commander of the Ternopil, told Ukraine’s Channel 5 by phone. The Russian official, who asked not to be named, called Ukraine’s claim disinformation. Western diplomats are seeking to calm tensions in Ukraine, with U.S. Secretary of State John Kerry arriving in Kiev today.
  • Russia Raises Main Rate as Ukraine Crisis Threatens Economy. Russia raised its main interest rate the most since 1998 as the currency plunged to a record and investors pulled money from the stock market on concern that President Vladimir Putin will invade Ukraine. The one-week auction rate, the benchmark introduced in September, was increased temporarily to 7 percent from 5.5 percent, the Bank Rossii said on its website today. The regulator also temporarily raised its other major lending rates by 150 basis points, or 1.5 percentage points.
  • Russia Gas Threat Shows Putin Using Pipes to Press Ukraine. OAO Gazprom’s threat to end natural gas discounts for Ukraine adds to the financial burden on the near-bankrupt government in Kiev and makes Europe’s energy supply part of the escalating crisis. Russia’s gas-export monopoly said on March 1 it may end last year’s agreement to supply Ukraine at a cheaper rate unless it’s paid $1.55 billion owed for fuel. It’s the first time since the overthrow of pro-Moscow president Viktor Yanukovych last month that Russia has directly used its position as Ukraine’s dominant energy supplier to pressure the new regime.
  • China Property Trust Defaults Forecast as Risks Flagged. China’s property trusts, grappling with repayments equivalent to the size of Puerto Rico’s economy, face rising default risks as a former central bank adviser dubs real estate the biggest threat to the economy. The trust funds must repay 634 billion yuan ($103 billion) of debt this year, up 50 percent from 2013, according to estimates from Haitong Securities Co., the nation’s second-biggest brokerage.
  • Deadly China Attack Gives Xi Impetus to Tighten Grip on Security. China’s Communist leader Xi Jinping, already emerging more powerful than his predecessor, has fresh impetus to tighten his hold on domestic security after an outcry over an knife attack on civilians three days ago. The Weibo microblogging service lit up with outrage in the wake of the stabbing deaths of 29 people, many of them migrant workers, at a train station in the southern city of Kunming -- a shock officials blamed on members of the ethnic Uighur separatist movement. One such posting, said: “It isn’t possible to negotiate with you or make any concessions,” from “Drowning Fish.”
  • Russian Stocks Tumble Most in Five Years as Putin Deploys Troops. Russian stocks slid the most in more than five years after President Vladimir Putin ordered the deployment of troops to Crimea, spurring prospects of sanctions against the country. The benchmark Micex Index (INDEXCF) of equities tumbled 11 percent to 1,288.81 by the close in Moscow, their biggest loss since November 2008. The dollar-denominated RTS Index (RTSI$) slumped 12 percent to 1,115.21, entering a bear market. OAO Gazprom, the gas-export monopoly, lost 14 percent to 121.04 rubles, while OAO Sberbank, the nation’s biggest lender, retreated 15 percent to 77.35 rubles. Miner OAO Mechel (MTLR) plunged 23 percent to 31.2 rubles. Ukraine warned that Putin’s military is strengthening its presence in Crimea as it mobilized the army and called for foreign observers amid the worst standoff between the East and West since the Cold War ended.
  • Emerging-Market Stocks Sink on Ukraine as Russia Slumps. Emerging-market stocks fell the most in a month as Russia’s threat to invade Ukraine spurred the worst selloff in the Micex Index (INDEXCF) since 2008 and sent the ruble tumbling even as the central bank raised interest rates. The MSCI Emerging Markets Index lost 1.5 percent to 951.63 at 10:09 a.m. in New York.
  • Europe Stocks Fall After Six-Year High on Ukraine Tension. European stocks plunged the most in more than a month, retreating after reaching a six-year high last week, as investor concern increased that the escalating tension in Ukraine will hurt corporate earnings. Companies with exposure to Russia led losses, with Carlsberg (CARLB) A/S, owner of the country’s biggest brewer, falling the most in more than a year. Roche Holding AG slipped the most since August 2011 after a data monitoring committee advised it to end a trial of a lung-cancer drug. Bouygues SA slid 1.8 percent after a report that the French construction and telecommunications company may bid for Vivendi SA’s phone carrier SFR. The Stoxx Europe 600 Index dropped 2.3 percent to 330.36 at the close of trading, its biggest decline since Jan. 24.
  • Yen Hits 1-Month High as Putin Sparks Haven Asset Demand. “We start the week under pressure that built up over the weekend, thanks to aggressive rhetoric and action by Russian Prime Minister Putin,” Christopher Vecchio, a currency analyst in New York at DailyFX, wrote in a note to clients. “The Japanese yen and Swiss franc have filled the void as safe havens, while the U.S. dollar is hardly enthusiastic on the day.” The yen climbed 0.4 percent to 101.42 per dollar as of 12:52 p.m. in New York after reaching 101.20, the strongest level since Feb. 5. It added 0.7 percent to 139.54 per euro, reaching the biggest increase since Jan. 31. The 18-nation currency slid 0.3 percent to $1.3760.
  • WTI Crude Rises to Five-Month High on Ukraine. West Texas Intermediate crude surged to a five-month high as Brent advanced amid escalating tension between Ukraine and Russia, the world’s biggest energy exporter. WTI climbed as much as 2.6 percent. Ukraine mobilized its army reserves as Russia seized control of the Black Sea region of Crimea. 
  • Gold Climbs to Four-Month High as Ukraine Tension Boosts Demand. Gold futures for April delivery rose 2.4 percent to $1,353.80 an ounce at 11:48 a.m. on the Comex in New York. Prices touched $1,355, the highest for a most-active contract since Oct. 30. Silver for May delivery rose 1.7 percent to $21.61 an ounce on the Comex.
Wall Street Journal:  
  • Japan Plans 3,000-Troop Unit for Island Defense. Japan plans to establish a 3,000-troop unit specializing in amphibious operations "as swiftly as possible," the defense minister said, publicly outlining details of the new unit for the first time as tensions with China grow over disputed islands. Japan has undertaken an ambitious project to create a force similar to the U.S. Marine Corps, and Japanese Self-Defense Force Troops have been receiving increasingly frequent training from their U.S. counterparts in the past few years.
CNBC:
ZeroHedge:
Business Insider: 
Les Echos:
  • Societe Generale strategist Albert Edwards says emerging markets slowdown will affect Europe, according to an interview. Germany is especially at risk, he said. Emerging markets will devalue their currencies, according to Edwards.
The Globe and Mail:
Al Arabiya:

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