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Devaluation no longer a dirty word

Published Tuesday, May 13th, 2014

The stock markets were not deterred yesterday by Ukrainian uncertainties or comments from the Chinese President that the country was embracing a “new normal” of slower growth. New record highs were set for the Dow and S&P 500 and a 6-year high for the Eurofirst 300.

On the face of it events in Ukraine took a turn for the worse following the “referendum” which separatists claimed showed 89% in favour of independence in Donetsk and 96% in Luhansk. The two regions formally requested to become part of the Russian Federation to which Russia responded that it respected the referendum results.

The EU tightened sanctions and Gazprom said it will cut off gas supplies to Ukraine if it does not receive pre-payment for June supplies by June 3rd. The stock markets, particularly in Europe, did well to shake this off. Perhaps the view is that they have seen President Putin blink and what is going on now is merely noise.

to read the rest of the report, please click here 

Posted by David Hufton