Tuesday, March 18, 2014

Today's Headlines

  • Ukraine Says Conflict With Russia Turned Military From Political. Ukraine’s government said its conflict with Russia has entered a military phase as clashes in the breakaway Crimea region intensified, killing at least one Ukrainian serviceman. The country is seeking to set up a commission including the defense ministers of Russia, the U.S. and the U.K. to avert further escalation, Prime Minister Arseniy Yatsenyuk told reporters in Kiev. A soldier was killed when unidentified masked gunmen stormed a military installation in Crimea, Vladyslav Seleznyov, a spokesman for Ukraine’s defense ministry in the region, said by phone. Tensions are increasing after Russian President Vladimir Putin flouted Western sanctions and signed a treaty annexing Crimea into the Russian Federation. The Black Sea peninsula in a disputed March 16 referendum voted to leave Ukraine and join Russia. Russia has 25,000 troops in Crimea, which are blocking 38 Ukrainian units in the region, Serhiy Hayduk, the head of the Ukrainian Navy, said via video link. Hayduk will speak with a Russian deputy defense minister to avert escalation, he said.
  • Russian Troop Buildup Seen at Ukraine Border After Crimea. Russia has increased its military presence near Ukraine’s border as it tries to repeat the events that led up to Crimea’s incorporation into Russia in the east of the country, the governor of the Kharkiv region said. Russian forces have been boosted in the last five days, massing along roadways about 15 kilometers (9 miles) from the border, said Ihor Baluta, appointed by the interim government in Kiev after the ouster of Viktor Yanukovych last month. “They are concentrated along the highways, which implies they want to move quickly into our territory,” Baluta said in an interview in Ukraine’s second biggest city today. “Russia is trying to create the situation unfolding now in the south here in eastern regions.”
  • Putin Says Russia Doesn’t Want Ukraine Split After Crimea. Western leaders condemned Russian President Vladimir Putin’s push to annex Crimea and promised further sanctions as early as this week, ratcheting up pressure in the biggest diplomatic crisis since the Cold War. British Prime Minister David Cameron called Putin’s seizure of the Black Sea peninsula from Ukraine a breach of international law that sent “a chilling message across the continent of Europe.” He vowed to push European leaders to agree to further measures against Russia when they meet March 20. U.S. Vice President Joe Biden, in Poland on a trip to meet regional allies, predicted “additional sanctions” over what he called “a brazen military incursion.”
  • Ruble Drops With Bonds as Putin Backs Crimea Accession Bid. The ruble and government bonds fell after President Vladimir Putin said he supported a request from Ukraine’s breakaway Crimea region to join Russia, stoking concern harsher western sanctions may follow. Stocks gained.The ruble weakened 0.4 percent to 42.8996 against Bank Rossii’s target basket of dollars and euros by 2:30 p.m. in Moscow. The yield on government bonds due February 2027 rose eight basis points, or 0.08 percentage point, to 9.44 percent.
  • Bearish Bets on Japan Stocks Jump to Highest in 5 Years. Bearish bets on Japanese stocks surged to the highest in at least five years, signaling investors predict further declines for a market that’s already the developed world’s worst performer this year. Short sales comprised 36 percent of total trading on the Tokyo Stock Exchange yesterday, the highest since the data series began in October 2008. Paper manufacturers were the most-shorted industry, followed by banks and brokerages, the exchange data show. 
  • German ZEW Investor Confidence Falls to Lowest Since August. German investor confidence fell to the lowest since August as political uncertainty in Ukraine threatens to weigh on a recovery in Europe’s largest economy that may be nearing its peak. The ZEW Center for European Economic Research in Mannheim said its index of investor and analyst expectations, which aims to predict economic developments six months in advance, slid to 46.6 from 55.7 in February. That’s the third monthly decline. Economists forecast a decline to 52, according to the median of 41 estimates in a Bloomberg News survey. The gauge reached a seven-year high of 62 in December.
  • IMF Growth Forecasts Seen Too Optimistic in Large-Loan Countries. The International Monetary Fund tends to be too upbeat when projecting the economic growth of countries that receive large loans, an internal audit found. In a report that looks at IMF loan programs between 2002 and 2011, the auditor found that “the forecast bias at program inception was optimistic and significant” for nations that could borrow more than their size at the fund would allow under the “exceptional access” rule. 
  • European Stocks Advance, Extending Rally; Kuoni Increases. European stocks rose, extending their biggest gain in two weeks, after Russian President Vladimir Putin said he isn’t seeking to split up Ukraine. Kuoni Reisen Holding AG (KUNN) climbed 8.2 percent after Switzerland’s biggest travel company posted 2013 profit that exceeded analysts’ estimates. SBM Offshore NV rallied 6.3 percent. Cairn Energy Plc fell to its lowest price in more than 10 years after saying it is suspending a buyback program. Scania AB declined 2.1 percent after a board committee recommended rejecting Volkswagen AG’s takeover offer. The Stoxx Europe 600 Index gained 0.6 percent to 327.93 at the close in London, after earlier falling as much as 0.5 percent.
  • High-Speed Trading Faces New York Probe Into Fairness. New York’s top law enforcer has opened a broad investigation into whether U.S. stock exchanges and alternative venues provide high-frequency traders with improper advantages. Attorney General Eric Schneiderman said today that he’s examining the sale of products and services that offer faster access to data and richer information on trades than what’s typically available to the public. Wall Street banks and rapid-fire trading firms pay thousands of dollars a month for these services from firms including Nasdaq OMX Group Inc. (NDAQ) and IntercontinentalExchange Group Inc.’s New York Stock Exchange. 
Wall Street Journal: 
  • Russia's Putin Signs Treaty to Annex Crimea. President Says Ukraine Region Is Vital to Russia's Security. In an otherwise defiant speech to both houses of parliament and top officials, Mr. Putin dismissed sanctions and threats of other consequences from Europe and the U.S., saying the West had "crossed the line" by fomenting what he called a putsch in Kiev earlier this year.
  • CFTC Expected to Delay Planned Overseas Derivatives Trading Restrictions. New Rules on Derivatives Trading Set to Go Into Effect March 24. The Commodity Futures Trading Commission is expected to delay planned overseas derivatives trading restrictions relating to a continuing effort to harmonize domestic and international rules. The CFTC, the main U.S. derivatives regulator, is likely to put off restrictions on derivatives trading in Europe set to go into effect March 24, according to a person familiar with the matter. It was unclear how long the delay would last.
Business Insider: 
  • This Is The Top, Right? Borrowing money against your home to buy stocks at multi-year highs? What could go wrong?

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