News flow has confounded the hopes of those who might have thought the week would see an end to the current barrage of selling in global indices. Russia is now revelling in its status as both the de facto and de jure power in the Crimea, flexing its muscles and generally making everyone nervous. The flash HSBC China manufacturing purchasing managers index was below forecasts, putting indices firmly on the back foot. Although French data was a pleasant surprise, showing decent growth, it was insufficient to counter weaker German numbers.
What we are still lacking is a catalyst to drive markets higher from here. A simple lessening of tensions in Ukraine, or merely in-line economic data, isn’t enough. Russian forces massing on the Ukrainian border are enough to provoke fears of another annexation on the fringes of Europe. With the US dollar still in favour following last week’s Federal Reserve meeting, the outlook remains cloudy for risk appetite.
At least we’re seeing US futures up across the board. A week of economic data from all parts of the US economy may help provide a more positive spin as we enter the final trading week of March and the first-quarter. Ahead of the open, we expect the Dow Jones to start ten points higher, at around 16,312.