Equity markets have seen a steady stream of positive corporate data emerging from the US, as more and more US companies have reported their quarterly figures. Although markets will be closed for the next couple of days, news flow and developments are likely to materialise out of the Ukraine, so a ‘risk off’ mentality has been prevalent among this morning’s traders.
The consequences of yesterday’s events are likely to see western countries once again fully focus on Russia’s efforts to destabilise and topple Ukraine. This is most probably going to result in the call for further sanctions against Russia firms, and affiliates and friends of Vladimir Putin.
To date, the Russian equity market and Russian ruble have suffered the most from this but ultimately the reliance of eurozone countries, specifically Germany, to energy supplies from Russia and Ukraine will be scrutinised.
While the index has bounced along on a longer-term bullish trend for the last week, yesterday’s events have finally seen this trend broken. On an intraday basis, the 200-day moving average has also been broken leading us to believe that we could now see lower lows as more of this year’s rally is unwound.