Eastern European tension dominates global market sentiment on Thursday, with the European markets suffering during the morning session.
Since the ousting of former Ukraine president Viktor Yanukovych last Saturday (February 22), traders and investors have been watching the situation unfold, looking closely for any hint that military intervention might be required. The announcement that Russian President Vladimir Putin had put 150,000 Russian troops on alert heightened the tension, and is likely responsible for Thursday’s sell off, with investors looking to reduce their exposure to what could be a volatile geopolitical environment over the weekend.
A combination of the aforementioned unrest and a worse than expected consumer price index release has led to the German market taking the brunt of the global declines. As we head into the European markets afternoon session, the DAX is down more than 1% at 9,557, 103 points lower than its open at 9,660. While not as dramatic, the FTSE100 is also down, currently trading at 6,779, a 19-point (0.29%) decline on an open of 6,799. Finally, the CAC is currently trading at 4,383.07, a 13.9-point (0.32%) decline on an opening price of 4,414.
Looking globally, as things stand, S&P 500 futures are down -0.06% at 1840.9, NASDAQ 100 futures are up 0.18% to 3,680.20, the Dow 10 is down 0.04% at 16,185.80 and the Nikkei is down 0.32% at 14,923.11.
In contrast to the situation in Germany, a flurry of positive U.S. data might counteract the bearish bias initiated by the situation in Ukraine, with the headline figure, durable goods orders, coming out at -1.0% against the forecast -1.7%.
Another potential market mover, Janet Yellen is set to testify to the U.S. Senate come 15:00 GMT. Traders and investors will watch the testimony closely for hints as to how her monetary policy decisions might affect the economy. Tapering the ongoing stimulus package is a Federal Reserve priority at the moment, but the wrong approach could lead to trouble not only in the U.S., but across the globe.
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