Good morning! Here's what you need to know.
Russia and Ukraine cool off. U.S. Secretary of State John Kerry will arrive in Kiev, but Russia's "ultimatum" against Ukrainian troops passed without conflict. Russian soldiers did fire warning shots at Ukrainian forces in Crimea, but Russian troops near the border were reportedly told to halt exercises and return to base. Russian President Vladimir Putin told the press that ousted Ukrainian leader Viktor Yanukovych is still the real president. "The legitimate president, Yanukovych, asked Russia to defend the lives and health of Ukrainians. So our major concern is the ... nationalists and radical extremists that are rampant on the streets of Kiev," he said.
Global markets ease after yesterday's rout. Even though the situation is far from over, "Financial markets are short-sighted animals and everything is calmer," explained Kit Juckes of SocGen. Japan's Nikkei closed up 0.47% and Korea's KOSPI was 0.54% lower. European markets were higher, and U.S. futures pointed to a positive open. Even Russian stocks, which took a beating yesterday, are up 4%. Markets went on a tear as Putin spoke with the press. "As for the use of military use, there is no need for it," Putin said. "But we have that option."
Gold falls. As further indication that markets think the Russian situation is cooling off, gold fell from its four month high after the Russian military drill ended, Bloomberg reports. Gold rose as much as 2.1% yesterday as the situation between the two countries intensified.
A Kremlin aide makes a silly threat. Hardline Putin aide Sergei Glazyev threatened that if the U.S. were to impose sanctions, Russia would drop the dollar as a reserve currency and fail to pay off loans to U.S. banks, Reuters reports. An attempt to impose sanctions would end in a financial crash for the U.S., Glazyev threatened. "All you can do is laugh at the notion that Russia has the ability to induce of a crash of the US financial system by getting away from the dollar," wrote our Joe Weisenthal. "Sure, if Russia wants it can conduct transactions in any currency it likes, but that won't stop Russian counterparties from then exchanging whatever currencies they trade in for the dollar."
Obama will release a new budget. The White House will offer its new plan today, which is expected to request $4 trillion in spending for the year beginning October 1. It will "propose larger tax credits for childless workers, a higher minimum wage, a redesigned military and the elimination of certain tax breaks for upper-income Americans," the Wall Street Journal's Damian Paletta reports. "Each of the initiatives has either been proposed before or telegraphed for weeks, and they lack legislative momentum. Rather, they represent the challenges that a president with weak poll numbers faces as he tries to refashion ideas at a time when coming fall elections frame almost every political decision."
Russia stops its buying program after the rouble plummets. The Russian finance ministry says it's done buying foreign currencies on the open market due to "increased financial market volatility," the WSJ reports. "The finance ministry's decision to buy foreign currency worth 212.2 billion rubles by the end of May had a negative impact on the ruble in February despite the ministry's claim that its purchases won't have an impact on the exchange rate," according to the report.
At 9:45 a.m., ISM New York will be released. Economist expect the regional indicator to come in at 63.2, down from 64.4 last month.
Australia holds rates. The Australian central bank kept interest rates at a record low 2.5% as the country tries to further ignite its economy.
Trading revenue will slide yet again. Citigroup and JP Morgan warned investors for another dip in first-quarter trading revenue, Bloomberg reports. "Citigroup finance chief John Gerspach said yesterday his firm expects trading revenue to drop by a 'high mid-teens' percentage, less than a week after JPMorgan Chief Executive Officer Jamie Dimon said revenue from equities and fixed income was down about 15 percent," according to the report.
Tesla will make a big European expansion. "By the end of this year, we expect you will be able to travel almost anywhere in Europe using only Superchargers," Tesla CEO Elon Musk said, referring to the expansion of Tesla's charger network in Europe. The U.S. carmaker expects by 2014, combined European and Asian sales will be twice as much as in North America, the FT notes.
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