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The Crimean Crisis

Hello, I'm Sarah Fenwick. Welcome to Banc De Binary's asset round up. This month we're going to examine theeconomic effects of tensions between the USA and Russia onEuropean stocks, gold and the Euro. The Crimean crisis marked the beginninga destabilizing period between Russia and the West with a clear line of division emergingbetween the Western powers in Russia. The crisis has sent the Russian ruble intoa tailspin and initiated rounds of sanctionsbetween the West and Russia.

With tension starting to escalate, theUkrainian government has decided to take decisive action against what it sees asRussians sponsored terrorism and unrest within the country. This ishad farreaching effects on the financial markets. Europeaneconomic sentiment is bearish and is so for several reasons. TheUkrainian crisis is the number one source of uncertainty but the InternationalMonetary Fund has also revised its forecast for global growth

downwards. By the close of trade onTuesday the 8th of April, the FTSE 100 index dropped 0.49percent to close at 6590.69. The German DAX 30 in Frankfort retreated to 9490.79 down 0.21 percent. In Paris the CAC index closed at 4424.83 points down 0.25 percent. Along withthe poor outlook for European stocks

with the recent severe winter conditionsin the US there are now fears that the coldweather will start to bite into company profits. There is a low appetite for riskseeking behavior among investors right now especially in viewof the recent developments in the Ukraine Russia crisis. The international communityfears the Ukraine may become embroiled in a bitter Civil War

which will have farreachingimplications for global stability. The IMF has sited many variables asthe reasons for revising its global growth forecast these include the Ukraine crisis, theFederal Reserve Bank's policy with regards to quantitative easing, the loss of confidence in a poorperformance of emerging market economies and the slowing down of the Chineseeconomy. However both the US and China are viewed a strong performers and growthforecast of 3.6 percent for 2014

and 3.9 percent 2015 are expected. On the flip side, the IMF announced apositive expectation regarding European Union performance for 2014. An upwards revision to thetune of 0.2 percent 1.2 percent for the year is penciled in.France is also facing some austerity measures as it seeks to make good on itspromise to produce 50 billion savings overthe next three years. This is necessary for France to maintainits deficit to GDP ratio

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