Bloomberg:
- Ukraine Tells Russia Invasion Means War as Putin Makes Plans. Ukraine told Russia that a military invasion would be an act of war following a vote by lawmakers in Moscow to give President Vladimir Putin the right to send troops after pro-Russian forces seized control of Crimea. Ukraine, which put its military on full combat alert, is also mobilizing the reserves, Andriy Parubiy, secretary of the National Security and Defense Council, said in a briefing today. He urged the U.S. and U.K. to defend the country’s territorial integrity. Putin told U.S. President Barack Obama that Russia may act if violence spreads to Russian-speaking regions, the Kremlin said in a statement. “The Ukrainian state will protect all citizens no matter in which region they live in and which language they speak or which church they attend,” acting Ukrainian President Oleksandr Turchynov said.
- Putin Grab for Crimea Shows Trail of Warning Signs West Ignored. Putin’s been cautioning the U.S. and other North Atlantic Treaty Organization states for at least six years not to impede Russian interests in Ukraine, particularly in the Black Sea peninsula of Crimea, home to its largest overseas naval base.
- Property Trust Defaults Forecast as Risks Flagged: China Credit. 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% from 2013, according to estimates from Haitong Securities Co., the nation's second-biggest brokerage. The yield on the 2014 notes of Myhome Real Estate Development Group Co., based in the central city of Wuhan, jumped 185 basis points in the past year to 7.78%. The real estate market is "the root of all risks" as falling prices erode local governments' ability to raise funds for spending that helps the economy, Li Daokui, former People's Bank of China adviser, said Feb. 25.
- China Separatists Stab 29 to Death at Train Station, Xinhua Says. Xinjiang separatists killed at least 29 people and wounded 130 in knife attacks at a railway station in southwestern China yesterday, the official Xinhua News Agency reported, citing the Kunming municipal government. Police shot and killed at least four of more than 10 masked attackers who stabbed people at Kunming station yesterday afternoon, and were still hunting for the rest, Xinhua said. The injured were taken to more than 10 local hospitals in Kunming for treatment, it said. President Xi Jinping sent Meng Jianzhu, the Communist Party’s security chief, and the government’s public security minister to Kunming, and urged severe punishment of the attackers and a crackdown on violent crimes to maintain social stability, Xinhua reported.
- Chinese Austerity Campaign Spreads Beyond Ferraris to Funerals. Zhang Hongbao, who’s run a funeral home in Shanghai for more than a decade, says he can’t recall the last time business was so dead. “Government officials don’t dare to spend too much on funerals,” Zhang, owner of Shanghai Funeral Service (China) Co., said in an interview. “It’s the peak of the anti-corruption drive. They choose simple ceremonies, such as inviting fewer people and have quieter events rather than the noisy rituals of the past.”
- China Factory Index Decline Adds to Li Growth Challenges. A Chinese manufacturing gauge fell to an eight-month low in February, adding to challenges for growth as Premier Li Keqiang prepares to map out the government’s economic strategy to the nation’s legislature. The Purchasing Managers’ Index (CPMINDX) was at 50.2, the National Bureau of Statistics and China Federation of Logistics and Purchasing said today in Beijing. That compared with January’s 50.5 reading and the 50.1 median analyst estimate in a Bloomberg News survey. “The slowdown in manufacturing growth is due to a deceleration in investment, especially of credit-sensitive infrastructure and real-estate investment,” said Louis Kuijs, chief China economist at Royal Bank of Scotland Plc in Hong Kong.
- Xi Orders Terrorism Crackdown After Deadly China Knife Rampage. China’s President Xi Jinping ordered a crackdown on “violent terrorist activities” after 33 people died when knife-wielding assailants rampaged through a train station in a southwestern city on March 1. Local authority officials in Kunming said evidence at the scene showed it was a terrorist attack orchestrated by Xinjiang separatist forces, the state-run Xinhua News Agency reported yesterday. A group promoting human rights for the region’s minority people, the Uighur, called for a transparent investigation.
- China Growth-Target Dilemma Looms as Policy Goals Demand Slowing. China’s Communist Party leadership faces a dilemma over where to set a growth goal for 2014 as President Xi Jinping wrestles with sustaining expansion while limiting debt risks, environmental damage and social unrest. The target, set at 7.5 percent last year, will be announced at this week’s meeting of the National People’s Congress in Beijing. In a Bloomberg News survey, 63 percent of economists predict the same number this year, while 33 percent see either a 7 percent goal or a switch to a range, such as 7 percent to 7.5 percent.
- Shirai Suggests Widening BOJ Target Once Inflation Advances. Bank of Japan board member Sayuri Shirai suggested the central bank could broaden its 2 percent inflation target into a numerical range once price gains advance closer to the goal.
- Asia Stocks Drop as Havens Sought on Crimea; Wheat Surges. Asian stocks and U.S. equity-index futures tumbled with emerging-market currencies while the yen, gold and Treasuries gained as tensions over Russia’s intervention in Ukraine intensified. Wheat climbed the most since August as the crisis stoked supply concerns. The MSCI Asia Pacific Index dropped 1.3 percent by 10:50 a.m. in Tokyo and Standard & Poor’s 500 Index futures fell the most in a month as U.S. Secretary of State John Kerry flies to Kiev today. The yen added 0.4 percent versus the greenback, which strengthened against emerging-market currencies from South Korea to Poland. Brent crude jumped as much as 1.9 percent and natural gas surged while gold climbed 1.2 percent, leading a rally in precious metals. Ten-year Treasury yields slipped to an almost one-month low and Asian bond risk rose. Wheat jumped as much as 4.5 percent and corn rose to a five-month high.
- Yen Gains With Dollar as Putin Sparks Haven Asset Demand. The yen gained against all of its 16 major peers as Russian President Vladimir Putin’s threat to invade Ukraine intensified one of the most serious standoffs since the Cold War, boosting demand for haven assets.
- Ruble Set to Weaken as Putin’s Ukraine Incursion Risks Sanctions. The threat of Western sanctions against Russia stands to dry up demand for the country’s assets and deepen a selloff in the ruble after President Vladimir Putin’s military forces took over parts of neighboring Ukraine.
- Ukraine Tension Seen Stoking Gas, Crude Prices on Supply Concern. Natural gas and crude oil rose amid investor concern that escalating geopolitical tensions over Ukraine could curb energy supplies. Natural gas futures for April delivery surged as much as 2.4 percent to $4.721 per million British thermal units on the New York Mercantile Exchange today, after sliding 25 percent last week. Brent crude advanced 1.3 percent to $110.45 a barrel on the ICE Futures Europe exchange in London.
- Hedge Funds Most Bullish on Gold Rally in 14 Months: Commodities. Hedge funds raised bullish gold wagers to the highest in more than 14 months amid mounting concern that the U.S. economic recovery is weakening. The net-long position climbed 25 percent to 113,911 futures and options in the week ended Feb. 25, the highest since December 2012, U.S. Commodity Futures Trading Commission data show. Net-bullish holdings across 18 U.S.-traded commodities advanced 16 percent to 1.45 million contracts, the most since April 2011. Coffee wagers reached a 33-month high.
- Nigeria Militant Attacks Kill at Least 90 in Northeast Region. At least 90 people died in Nigeria’s northeastern Borno state after bombings and attacks carried out by suspected Islamist militants. Two explosions yesterday evening at a crowded marketplace in the Ajilari area of Maiduguri left 51 people dead, according to a body count by locals and anti-insurgent vigilante group members, Modu Kolo, a 33-year-old resident, said by phone today. In a separate attack yesterday, gunmen invaded Mainok village, killing at least 39, said Bunu Kaka, a 42-year-old farmer who fled the hostility.
- VIX Traders Bet on Rising Volatility After Year of Calm: Options. Options tied to gains in the benchmark gauge for American stock volatility reached the highest prices in six years last week, reflecting bets that the calm prevailing in equities for the last year won't last.
- Crisis in Ukraine. Streaming Coverage:
- Putin Declares War. Will Obama and Europe let him get away with carving up Ukraine?
CNBC:
- Russian banks raise forex rates to record highs: Report. Russian banks raised dollar and euro exchange rates to record highs on Sunday amid the crisis in Ukraine, Dow Jones reported. The wire service quoted one operator at an exchange office in Moscow as saying the office was only buying foreign currency, not selling.
Zero Hedge:
Business Insider:
Investing.com:
Handelsblatt:- Up Next: Emerging Market Banking Crises. Asia Confidential thinks the vast majority of commentary has missed the underlying reasons for emerging market currency volatility, with the yuan being the latest example. What we're really witnessing is a major rebalancing of global economic trade.
- SEC investigates Citigroup over fraudulent Mexican loans-source. The U.S. Securities and Exchange Commission is investigating Citigroup for accounting fraud after it disclosed bogus loans in its Mexican Banamex unit, a source familiar with the investigation said. The securities regulator is also examining whether Citigroup violated the Foreign Corrupt Practices Act, the source said.
- Russian PM Medvedev warns Ukraine's new leaders they won't last. Russian Prime Minister Dmitry Medvedev said on Facebook on Sunday that Ukraine's leaders had seized power illegally, and predicted their rule would end with "a new revolution" and new bloodshed.
- BOE's Carney Warns of China's Shadow Banks. Sector grew fast in last 5 years, holds risks for world economy, citing Bank of England Governor Mark Carney. Shadow banks and regulated banks intertwined via implicit guarantees, Carney said. Central banks need to take into account what their actions mean for wold economy. ECB's stress test must by "tough, credible"; stress will show at some lenders in crisis countries, Carney said.
- China’s credit tightening is serious. The yuan fell 1.3% against the dollar last week, which is very steep in context. There are three theories about what’s going on.
Weekend Recommendations
Barron's:- Bullish commentary on (VZ), (ATW), (YUM), (FTD), (SPG), (PLD), (NTRI), (CMG) and (BKS).
- Asian indices are -1.0% to -.50% on average.
- Asia Ex-Japan Investment Grade CDS Index 136.0 +3.0 basis points.
- Asia Pacific Sovereign CDS Index 101.0 -1.25 basis points.
- FTSE-100 futures -.91%.
- S&P 500 futures -.72%.
- NASDAQ 100 futures -.71%.
Earnings of Note
Company/Estimate
- (NUS)/2.01
- (MDR)/.16
- (MBI)/.17
- (SSYS)/.49
8:30 am EST
- Personal Income for January is estimated to rise +.2% versus unch. in December.
- Personal Spending for January is estimated to rise +.1% versus a +.4% gain in December.
- The PCE Core for January is estimated to rise +.1% versus a +.1% gain in December.
- Final US Markit PMI for February is estimated at 56.7.
- ISM Manufacturing for February is estimated to rise to 52.0 versus 51.3 in January.
- ISM Prices Paid for February is estimated to fall to 57.4 versus 60.5 in January.
- Construction Spending for January is estimated to fall -.5% versus a +.1% gain in December.
- Total Vehicle Sales for February are estiamted to rise to 15.4M versu s 15.16M in January.
- None of note
- The Eurozone Manufacturing PMI, RBA decission, Morgan Stanley Utilities Conference, Cowen Healthcare Conference and the Morgan Stanley Tech/Media/Telecom Conference could also impact trading today.
