21 Mar 2014
EMEA EM Express: Baltic region boosting military forces in anticipation of Putin's next move
FXStreet (Łódź) - Tensions are running high in the Baltic region, following Russia's annexation of Crimea and military preparations are under way to boost defenses in order to be able to counter a potential Russian aggression.
France has volunteered on Friday to send fighter jets to Poland and the three Baltic states to support NATO forces in patrolling the region. The US has already offered additional F-15 fighter jets at the beginning of the month and ten of will be carrying out air patrols in the area, until Poland takes over at the beginning of May.
Poland’s defense ministry also said that it would bring forward the tender for a missile defense system, which was initially planned for June this year. "Poland plans to choose the best offer for its missile defense in the next few weeks," the ministry's spokesman Jacek Sonta informed.
Ukrainian troops meanwhile were invited to take part in a multinational NATO training in Bulgaria, apparently to give Russia a signal that Kiev can count on international support in case of an aggression.
The announcement of additional sanctions against Russia by the EU and US yesterday resulted in Russia threatening retaliation through similar measures against the West. Finally, Putin decided not to respond just yet, but in the meantime Fitch as well as Standard & Poor's revised Russia’s credit rating outlook from stable to negative on Thursday, on concerns with the impact of the West's sanctions on the country's already fragile economy.
Meanwhile, the developments in Ukraine have overshadowed events in Turkey where Turkish prime minister Recep Tayyip Erdogan blocked Twitter on Friday in an attempt to halt a corruption scandal. On Thursday, recordings and documents giving evidence that the prime minister and other high-ranking officials were involved in corruption, were spread through this social media.
Two weeks ago Erdogan threatened to close down both Twitter and Facebook, which he said were platforms abused by his enemies, conducting a “smear campaingn” against him.
Vice-president of the EU commission Neelie Kroes reacted to the blockage by tweeting: "The Twitter ban in #Turkey is groundless, pointless, cowardly. Turkish people and intl community will see this as censorship. It is."
In Poland the central bank released minutes from its last meeting, which showed that rising rates in response to the events in Ukraine were not considered, although they had influenced the MPC's forward guidance. Therefore, the period during which rates will be kept unchanged would be prolonged until the third quarter of the year to give more time for the stabilization of the business environment.
In the opinion of Grzegorz Ogonek from ING: “The first rate increase will come in 1Q15 and that the pace of any further action will be even slower –
with a hike of 75bp overall in 2015, and the same amount in 2016.”
Economic data
On Friday,the Hungarian Central Statistical Office released Gross Wages data, which on an annual basis registered a 0.9% increase in January, compared with the 1.1% drop in December.
Technicals
The Russian ruble rose for the fouth day by 0.2% to 42.2400 against Bank Rossii’s dollar-euro basket on the back of the Micex Index reversing its earlier losses and Russian companies paying their taxes. USD/RUB fell by 0.36% to 36.20 after the S&P ratings announcement.
The daily FXStreet Trend Index for USD/RUB was slightly bullish, with the OB/OS Index neutral. RSI was at 63.4049 at the last close. Daily 2-StDev Volatility Bandwidth was shrinking at 3031 pips, with ATR (14) expanding at 3746 pips.
France has volunteered on Friday to send fighter jets to Poland and the three Baltic states to support NATO forces in patrolling the region. The US has already offered additional F-15 fighter jets at the beginning of the month and ten of will be carrying out air patrols in the area, until Poland takes over at the beginning of May.
Poland’s defense ministry also said that it would bring forward the tender for a missile defense system, which was initially planned for June this year. "Poland plans to choose the best offer for its missile defense in the next few weeks," the ministry's spokesman Jacek Sonta informed.
Ukrainian troops meanwhile were invited to take part in a multinational NATO training in Bulgaria, apparently to give Russia a signal that Kiev can count on international support in case of an aggression.
The announcement of additional sanctions against Russia by the EU and US yesterday resulted in Russia threatening retaliation through similar measures against the West. Finally, Putin decided not to respond just yet, but in the meantime Fitch as well as Standard & Poor's revised Russia’s credit rating outlook from stable to negative on Thursday, on concerns with the impact of the West's sanctions on the country's already fragile economy.
Meanwhile, the developments in Ukraine have overshadowed events in Turkey where Turkish prime minister Recep Tayyip Erdogan blocked Twitter on Friday in an attempt to halt a corruption scandal. On Thursday, recordings and documents giving evidence that the prime minister and other high-ranking officials were involved in corruption, were spread through this social media.
Two weeks ago Erdogan threatened to close down both Twitter and Facebook, which he said were platforms abused by his enemies, conducting a “smear campaingn” against him.
Vice-president of the EU commission Neelie Kroes reacted to the blockage by tweeting: "The Twitter ban in #Turkey is groundless, pointless, cowardly. Turkish people and intl community will see this as censorship. It is."
In Poland the central bank released minutes from its last meeting, which showed that rising rates in response to the events in Ukraine were not considered, although they had influenced the MPC's forward guidance. Therefore, the period during which rates will be kept unchanged would be prolonged until the third quarter of the year to give more time for the stabilization of the business environment.
In the opinion of Grzegorz Ogonek from ING: “The first rate increase will come in 1Q15 and that the pace of any further action will be even slower –
with a hike of 75bp overall in 2015, and the same amount in 2016.”
Economic data
On Friday,the Hungarian Central Statistical Office released Gross Wages data, which on an annual basis registered a 0.9% increase in January, compared with the 1.1% drop in December.
Technicals
The Russian ruble rose for the fouth day by 0.2% to 42.2400 against Bank Rossii’s dollar-euro basket on the back of the Micex Index reversing its earlier losses and Russian companies paying their taxes. USD/RUB fell by 0.36% to 36.20 after the S&P ratings announcement.
The daily FXStreet Trend Index for USD/RUB was slightly bullish, with the OB/OS Index neutral. RSI was at 63.4049 at the last close. Daily 2-StDev Volatility Bandwidth was shrinking at 3031 pips, with ATR (14) expanding at 3746 pips.