14 Mar 2014
Standoff between Russia and Ukraine affects global sentiment
FXStreet (Łódź) - As the referendum on whether Crimea should become part of Russia, considered illegitimate by the West, is drawing near, global markets moved to risk off mode.
Despite the fact that both sides declare they prefer to solve the situation through diplomatic channels, the threat of a military conflict remains. Russia has been reported to conduct large scale military exercises close to Ukraine´s borders, while Ukraine's acting President Oleksandr Turchynov announced today that the recently created 60,000 strong National Guard had been approved by parliament.
“In coordination with police the National Guard will ensure public safety and border security, and stop terrorism. Moreover, the National Guard will perform tasks typical for military forces,” the president said, adding that a Russian invasion could start “at any moment.”
EU officials have already warned that sanctions against Russia, including travel bans and asset freezes, would be imposed if the referendum on Crimea was carried out against international opposition. The referendum is scheduled for Sunday and the sanctions would come into force as soon as on Monday.
“The outcome of this weekend’s referendum on Crimea’s future will therefore be critical,” the ING team of analysts emphasize. “ The probable series of US and EU sanctions and counter-sanctions in the event of a full Crimean breakaway would weaken global growth and badly sap risk sentiment.”
Despite the fact that both sides declare they prefer to solve the situation through diplomatic channels, the threat of a military conflict remains. Russia has been reported to conduct large scale military exercises close to Ukraine´s borders, while Ukraine's acting President Oleksandr Turchynov announced today that the recently created 60,000 strong National Guard had been approved by parliament.
“In coordination with police the National Guard will ensure public safety and border security, and stop terrorism. Moreover, the National Guard will perform tasks typical for military forces,” the president said, adding that a Russian invasion could start “at any moment.”
EU officials have already warned that sanctions against Russia, including travel bans and asset freezes, would be imposed if the referendum on Crimea was carried out against international opposition. The referendum is scheduled for Sunday and the sanctions would come into force as soon as on Monday.
“The outcome of this weekend’s referendum on Crimea’s future will therefore be critical,” the ING team of analysts emphasize. “ The probable series of US and EU sanctions and counter-sanctions in the event of a full Crimean breakaway would weaken global growth and badly sap risk sentiment.”