Spreadex Market Update

Equities are making a tentative move higher



Equities are making a tentative move higher on news that Mr Putin, for now, does not intend to carve up any more of Ukraine, putting both ease and money back into risk assets. Crucially, the market was most fearful of further escalation given that a lot of what happened on Sunday had been priced in the previous week. Now, with Russia pausing at Crimea, markets can at least turn back to more familiar matters, such as earnings surprise and changes in future cash flows.

It felt very much as though participants needed an excuse to book profits and rebalance against what has been an exceptional period of returns for risk assets. And the debacle in Ukraine and Crimea presented a compelling reason to take capital off the table. What we should see now is business as usual. The market will, while keeping an eye on further developments, turn to the Fed for their guidance on rates and asset purchases. And listen closely for any change in data points and the expected trajectory of the largest economies.

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