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From Russia, with love

| Posted by: Paul Donovan | Tags: Paul Donovan

  • To the surprise of no one, Russian President Putin was re-elected over the weekend. This suggests Russian policies carry on, and foreign governments' policies towards Russia carry on. There is nothing here to change market expectations.
  • The "Russian Affair" in the US has attracted more attention from the US president. There are three ways this might affect markets in the future: if the investigation stops new policies being passed; if the outcome of the mid-term elections changes; if there is an increased risk of US President Trump leaving office. None of these seem serious market risks right now.
  • The Eurozone's trade balance data for January is due. January was a long time ago (for financial markets), but trade data is clearly increasingly sensitive as a topic. The Eurozone's trade surplus is one factor supporting the view of a rising euro over the course of this year.
  • China has appointed Peoples' Bank of China Deputy Governor Yi to head the central bank. The move is seen as signalling policy continuity. The PBoC does not have the status of other central banks, and the domestic financial system is a closed financial system. Nonetheless, markets generally appreciate continuity.