With the bond market closed today due to Veteran’s Day and the correlation and momentum ignition algos about to go berserk without any parental supervision, it was only a matter of time before some “stray” flashing red headline first sent first carry pair of choice, i.e., the USDJPY, and subsequently its derivative, the E-mini, into the stratosphere. And sure enough, just before 3am Eastern, it was once again Reuters’ turn to leak, only this time not about the ECB but Japan, as usual citing an unnamed “government official close to Abe’s office”, that Prime Minister Shinzo Abe was likely to delay a planned sales tax increase. From Bloomberg:

• JAPAN MORE LIKELY TO DELAY SALES TAX INCREASE, REUTERS REPORTS

And from the source:

Japanese Prime Minister Shinzo Abe is likely to delay a planned increase in the nation’s sales tax, judging that the economic recovery remains too fragile to weather a further blow, a government official close to Abe’s office said on Tuesday.

The comment comes as momentum appears to be building for Abe to delay the painful measure and call a snap election, with major parties scrambling to prepare for a possible campaign.

“There’s a high probability that the consumption-tax hike will be delayed,” the person told Reuters. “It looks like the government will begin full-fledged consideration of this.”

Which of course is a repeat of what Reuters said 2 days ago but since it came on the weekend, and the momentum ignition algos were sleeping, the news was waster from a market ramping perspective. Today’s result on the other hand was an instant surge in the USDJPY, which shortly thereafter touched on 116.00 the highest level in 7 years, and is up now 200 pips since yesterday as the obliteration of Japan’s economy proceeds, in turn pushing European stocks, and shortly, the S&P, higher.

It also explains why the other key overnight headline was the following:

• JAPAN RULING PARTY LAWMAKERS SAID PREPARING FOR SNAP ELECTION

The reason for that is that as we reported yesterday, the Japanese population is becoming increasingly dissatisfied with living under a central-planning money-printing madman who is willing to destroy the entire country just so a few billionaires can become trillionaires (or quadrillionaires in Yen terms). This was further substantiated by the latest consumer confidence data out of Japan, which dropped to 38.9 in Oct., down 1 point, with the sub-indices for overall livelihood, employment, income growth and willingness to buy durable goods all falling. Arguably the reason why a snap election is positive for risk is that Abe would be re-elected in a landslide. That is possible, but only if Diebold is again put in charge of all the voting machine and a whole lot of hanging chads result Abe’s “reelection.”

Meanwhile, European equities traded in the green from the off-set with the broader macro moves for session being dictated by events in Japan. As RanSquawk repeats, overnight, the Nikkei 225 surged higher following reports that PM Abe could delay the beginning of the sales tax hike by 18 months, with the leader potentially set to cash in on his increased popularity (given that 2/3 of the Japanese public view a sales-tax hike in an unfavourable manner) by calling a snap-election. Such a delay would be positive for Japanese equities as it would not restrain consumption as some had feared and thus benefiting spending within the economy. The move saw a second wave ahead of the European open following further source comments that indicated that such a delay is likely, with this rhetoric closely followed up by comments from LDP lawmakers confirming the snap election preparations are in place, which subsequently saw the Nikkei 225 CME future rise higher to trade with gains of 1.9%. Since then PM Abe has been on the wires saying that he has made no such plans to call a snap election, although this announcement brought little in the way of a market reaction.

Elsewhere, following the resurgence in the USD-index following these moves, USD exerted further pressure on the commodities complex, with WTI breaking below yesterday’s lows and squeezing the precious metals complex, which has subsequently left materials and energy names, the sole underperformers in Europe. Furthermore on a stock specific basis for equities, telecom names are the notable outperforming sector, following Vodafone’s (+5.4%) earnings report which has seen their shares climb to the top of the European leaderboard this morning.

As a reminder today is US Veteran’s Day which means there will be no pit trade in Chicago, however NYSE and NYMEX will both be open for trade as usual. And since volume will be abysmal, and since the USDJPY has given the green light, we expect the S&P to hit Goldman’s year end target of 2050 with virtually no resistance.

More specifically open outcry for CME FX and Interest Rate products is closed, however CME Globex electronic trade for FX, Interest Rate, Commodities and Metals will be open as per normal

To summarize:

European shares rise with the telco and real estate sectors outperforming and basic resources, oil & gas underperforming. Japanese yen weakens to 7-year low on reports Abe likely to delay sales tax increase. Companies including Vodafone, CRH, Hochtief, AP Moeller-Maersk released results. The Spanish and Italian markets are the best-performing larger bourses, Swiss the worst. The euro is weaker against the dollar. Japanese 10yr bond yields rise; U.K. yields increase.
Commodities decline, with natural gas, copper underperforming and corn outperforming. U.S. small business optimism due later.

Market Wrap:

• S&P 500 futures up 0.1% to 2036.4
• Stoxx 600 up 0.4% to 339
• US 10Yr yield little changed at 2.36%
• German 10Yr yield up 1bps to 0.85%
• MSCI Asia Pacific down 0.1% to 140.7
• Gold spot little changed at $1151.4/oz

Bulletin headline summary from RanSquawk and Bloomberg

• Speculation over a potential sales tax hike delay and calls for a snap election in Japan have boosted European equities from the get-go.
• This has subsequently seen USD/JPY touch its highest level since 2007, as such a move regarding the sale tax could be seen as a form of fiscal stimulus.
• Looking ahead, today’s session sees a lack of tier 1 releases, with volumes expected to be thin Stateside given the Veterans Day holiday.

FX

Following the aforementioned developments in Japan, JPY has been placed under broad-based weakness, with USD/JPY breaking above 115.00 and touching 116.00 for the first time since 2007 as should PM Abe delay the sales tax hike then this could be perceived as a form of fiscal stimulus for the Japanese economy. Furthermore, RANsquawk sources also reported macro fund buying in the pair to hedge Nikkei 225 option positions, which were reported at the 17,250 level. Elsewhere in FX markets things remain relatively subdued with a lack of tier 1 data for the session and volumes due to be light given the Veterans Day Holiday in the US.

COMMODITIES

The commodities complex has once again been largely swayed by movements in the USD-index with WTI prices slipping below USD 77.00 and yesterday’s lows in early trade, while precious metals prices also felt the squeeze of the resurgence in the greenback. However, since then WTI prices have managed to climb back above USD 77.00 with a volumes thin and a lack of fundamental newsflow to dictate the state of play. Nonetheless, it is worth noting that Libya’s Hariga port is still closed with talks with protesters ongoing, according to an oil official. Elsewhere, NatGas futures are continuing to pullback from last week’s hefty gains, although fears continue to mount over the possibility of a particularly could inter in the US which could trigger a surge higher in prices. Finally, Copper has consolidated a break below USD 3.00 in combination with strength in the USD and as industrials in Asia underperformed.

DB’s Jim Reid concludes the overnight recap

Over the last couple of months there has been no shortage of things to write about on a daily basis but it seems we’ve hit a little lull. The post payroll week is always a bit light on data, which is compounded by the fact that we’re now past the ECB meeting. Today is Veteran’s Day holiday in the US so we’re likely to be on the quiet side even though equity markets are open. The next major events are likely to be the European inflation and Q3 GDP numbers on Thursday and Friday this week.

I’m hoping for a little run of quiet markets as yesterday we started work on our 2015 outlook after a few weeks of reading and preparation. Every year at this time I always think the next year’s outlook is the hardest ever. This time feels no different. In our 2014 outlook – “The Bubble-Taper Tightrope” we basically felt that if central banks pulled back too quickly we’d have big problems for markets and if they kept the taps fully on we’d likely end up with a bubble in many asset classes. We thought overall they would err on the side of easy policy. In reality central banks have indeed controlled this year but we’ve ended up muddling through rather than seeing a strong trend either way emerge. By the end of H1 we were starting to see a bias towards bubbles but the end of QE has helped stop this and the universally strong positive trend that we saw when QE3 was in full flow has been waning. However there are still doubts as to whether the Fed can raise rates in 2015 and markets have responded positively to this. The ECB has disappointed but is now starting to expand its balance sheet again after a two and a half year hiatus and the BoJ has recently stepped on the accelerator again. So in spite of the Fed fully tapering, its been a positive year for central bank liquidity overall. It would likely have been a bad year without it though. Its hard to escape from a similar conclusion for 2015 but let’s see what our work leads us to write over the next 3-4 weeks. Any thoughts or moments of inspirations vis-a-vis 2015 would be gratefully received. Feel free to drop us an email.

In the absence of market moving news-flow/data, yesterday’s price action was relatively subdued. The S&P 500 (+0.3%) was pretty much unchanged at 2,038 although this still marks the fourth consecutive day of new highs for the index. Both the S&P and Dow have rallied over 7% in the last three weeks, marking it as the best three week performance for both indices since October 2011. Away from equities however, US Treasuries were notably weaker although that came on the back of a strong performance last Friday. The curve bear-steepened led by underperformance in longer-dated bonds. A soft 3yr auction and what was perceived to be a hawkish research paper from the economists of San Francisco Fed were both cited as possible reasons for the UST weakness.

In terms of the 3yr auction yesterday, the bid-to-cover ratio of the new notes was recorded at 3.18 which compares with an average of 3.42 over the past ten auctions. The now off-the-run 3yr yields rose +4bp to 0.97% whilst 10yr rose 6bps to 2.36% to give back nearly all of last Friday’s gains. In reality the 10yr yield has been bound inside the 2.20-2.39% range since we normalised from the ‘flash-rally’ in mid-October. We have more Treasury auctions this week with a 10y note scheduled for Wednesday and 30y on Thursday so it will be interesting to see how these go. As for the San Francisco Fed paper, economists noted that both monetary and fiscal policy projections have been based on the view that declines in the long-run potential growth rate of the economy will in turn push down interest rates. In contrast, an examination of private sector professional forecasts and historical data provides little evidence of such a linkage which suggests a greater risk, that future interest rates may be higher than expected. We’re not convinced but time will tell.

Before we look at markets elsewhere, there was further Fedspeak overnight. Rosengren was quoted as having said that the Fed should ‘fight low inflation as vigorously as it would a too rapid-run up in prices or else risk the same sort of prolonged slow growth plaguing Japan and Europe. He also repeated his call for the Fed to remain patient in raising rates until there is more certainty, although he mentioned that there are a number of forces conspiring against that.

Moving on to markets it was a notably weaker session for Commodities yesterday. WTI and Brent shed 1.8% and 1.3% respectively to US$77.4/bbl and US$82.3/bbl. Gold (-2.3%) also paid back some of Friday’s gains to close at US$1151/oz. On the subject of Gold, there is a Swiss referendum scheduled at the end of the month in which voters will be asked whether or not the Swiss National Bank should increase its Gold reserves to 20% from 8% currently. Early opinion polls are generally mixed on the subject but it does come at a delicate time for policy making for the SNB. The Swiss Franc has rallied to within 0.2% of its 1.20 level versus the Euro after having appreciated about 2% YTD against the neighboring currency.

Switching tracks to Asia there has been some interesting headlines coming out of the APAC meeting in Beijing overnight. The notable story centers on the agreement signed by Russia and China with the former to supply gas to China marking the second such deal this year between the two nations. The deal is notable given that it would mean Russia should be able to reduce its dependence on Europe as a customer and instead focus on further boosting its strategic ties with China, particularly as this comes on the back of heightened tensions around the Ukraine and continued threats of sanctions from the US and EU. Elsewhere at the gathering, there was a notable public meeting between President Xi from China and Prime Minister Abe of Japan. The meeting marks the first time that the leaders have officially come together since 2012 with Abe commenting afterwards that ‘Japan and China made the first step in improving relations by going back to the original point of a strategic relationship of mutual benefit.’

Staying in the region and looking at markets, Chinese equities are flat after opening strongly whilst the Hang Seng is +0.5% following yesterday’s rally as investor sentiment received a boost post the announcement of the Shanghai-Hong Kong Connect. Meanwhile we’ve had trade data out of Japan. They reported a September current account surplus of JPY963bn yen (vs. JPY538bn expected), significantly higher than the JPY287bn surplus print we saw in August. The Nikkei has risen 2.1% following the results whilst bourses in the rest of Asia are generally trading firmer. Asian credit markets are also fairly resilient with benchmark names around 1bps tighter.

Before we look at the day ahead we’ll just wrap up the European market moves yesterday. The Stoxx 600 closed +0.7% whilst Main and Xover finished the day 2bps and 10bps tighter respectively. With limited news flow some solid corporate earnings reports appeared to offset a weaker industrial production print out of Italy (-0.9% mom vs. -0.2% mom expected). Bunds closed +2bps wider whilst 10y yields in Spain were 3bps tighter on the day, shrugging off any worries over a political backlash in Spain following the results in the informal non-binding Catalan referendum.

Looking ahead to today we’ve got a fairly light calendar in the region which isn’t surprising given the US holiday. The October small business optimism print is the only US release to look forward to. Outside of the US, we’ve got retail data due out of the UK and the wholesale price index print in German. On a quiet day like this maybe its also worth keeping an eye on any interesting snippets arising from the conclusion of the 2-day APEC leader’s summit in Beijing today.

Let’s see if these quieter markets continue

Russia Signs Deal With Iran To Build 8 Nuclear Power Units

Submitted by Tyler Durden on 11/11/2014 08:00 -0500

With this year’s APEC meeting in China having just barely concluded, where the biggest news was not the inability of the US to make any material headway in trans-Pacific trade (who needs trade when you have a printer?) or that China is “willing” to import even more NSA bugs courtesy of Cisco and Qualcomm, but Russia’s second “western” mega gas deal with China, as well as the following photo-op of course…

… and with the WSJ reporting that in the now year-old “nuclear”negotiations between the west and Iran, there has been no progress, it was once again Putin’s turn to turn the screws on the lame duck president following a report moments ago that Russia inked a deal to build eight nuclear power units in Iran, as a new partnership agreement, guaranteed by the IAEA.

First, this how the success of US defines “success” in its ongoing negotiations to curb Iran’s nuclear program:

Two days of exhaustive negotiations between U.S. Secretary of State John Kerry and his Iranian counterpart, Javad Zarif, in the Persian Gulf nation of Oman resulted in no significant breakthrough in forging a comprehensive agreement to curb Tehran’s nuclear program by a Nov. 24 diplomatic deadline, said senior U.S. and Iranian officials.

 

 

“Real gaps” remain between Washington and Tehran, said an American diplomat, in describing talks that seek to end a decade-long standoff over the future of Iran’s nuclear program. 

 

Lower-level diplomacy between the U.S., Iran and other world powers continued on Tuesday in Muscat, as Mr. Kerry arrived in China to brief President Barack Obama on the status of the nuclear diplomacy.

 

“What we’ve said about this is that we may get there and we may not,” said a senior U.S. official who traveled with Mr. Kerry, referring to he prospects for a deal by late November. “I don’t think that anybody has said at any point recently that we are, quote-unquote ’on track’ to reach an agreement by the 24th.”

 

Iran’s second-highest official attending the Oman talks, Abbas Araghchi, described the talks as “tense” and said his negotiating team was committed to engaging in virtually round-the-clock talks to try and reach the deadline.

This was of course expected since nobody embodies US “success” better in recent years than Obama with perhaps the exception of John Kerry.

So as the US stumbles from one foreign policy debacle to another, this is what the Kremlin is doing. From RT:

Russia is to build eight nuclear power units in Iran, as a new partnership agreement, guaranteed by the IAEA, was signed in Moscow on Tuesday.

 

The head of the Rosatom, Sergey Kirienko, and the chief of the Atomic Energy Agency of Iran, Ali Akbar Salehi, signed a series of documents, promoting the links in the field of peaceful application of atomic energy between the countries, RIA Novosti reports.

 

According to the agreement, Russia is to construct eight pressurized water reactors “turn-key ready” in Iran. Four of them will be built at the Bushehr Nuclear Power Plant, also completed by Russia a year ago.

 

Besides, nuclear fuel for the future reactors will be provided by Russia during the whole life cycle of the new reactors. Spent fuel will be returned for processing and storage.

In other words, as the US does everything in its power to halt the spread of nuclear power in Iran (for peaceful purposes or otherwise) Tehran, in clear defiance of the US, just agreed with Russia to develop not one but 8 new nuclear reactors.

Confused: please refer to the picture at the top of this article for the clearest explanation possible.

end

This is huge!!

(courtesy zero hedge)

Petrodollar Panic? China Signs Currency Swap Deal With Qatar & Canada

Submitted by Tyler Durden on 11/10/2014 21:39 -0500

The march of global de-dollarization continues. In the last few days, China has signed direct currency agreements with Canada becoming North America’s first offshore RMB hub, which CBC reports analysts suggest “could double maybe even triple the level of Canadian trade between Canada and China,” impacting the need for Dollars.But that is not the week’s biggest Petrodollar precariousness news, as The Examiner reports, a new chink in the petrodollar system was forged as China signed an agreement with Qatar to begin direct currency swaps between the two nations using the Yuan, and establishing the foundation for new direct trade with the OPEC nation in the very heart of the petrodollar system. As Simon Black warns,“It’s happening… with increasing speed and frequency.”

As CBC reports,

Authorized by China’s central bank, the deal will allow direct business between the Canadian dollar and the Chinese yuan, cutting out the middle man — in most cases, the U.S. dollar.

Canadian exporters forced to use the American currency to do business in China are faced with higher currency exchange costs and longer waits to close deals.

“It’s something the prime minister has been talking about. He wants Canadian companies, particularly small- and medium-sized businesses, doing more and more work in China, selling goods and services there,” said CBC’s Catherine Cullen, reporting from Beijing.

 

 

Sovereign Man’s Simon Black has some ominous thoughts on Canada’s move…

It’s happening. With increasing speed and frequency.

The People’s Bank of China and the Canadian Prime Minister’s office issued a statement on Saturday stating that Canada will establish North America’s first offshore renminbi trading center in Toronto.

China and Canada agreed on a number of measures to increase the use of renminbi in trade, business, and investment. And they further signed a 200-billion renminbi bilateral currency swap agreement.

Moreover, just today, hot off the presses, thecentral banks of China and Malaysia announced the establishment of renminbi clearing arrangements in Kuala Lumpur, which will further increase the use of renminbi in South-East Asia

This comes just two weeks after Asia’s leading financial center, Singapore, became a major renminbi hub, with direct convertibility established between the Singapore dollar and the renminbi.

 

 

And as Black notes, everyone is in on the trend. All across the world, the renminbi is quickly becoming THE currency for trade, investment, and even savings.

Renminbi deposits in South Korea, for example, surged 55-times in one single year. It’s stunning.

The government of UK just issued a renminbi bond, becoming the first foreign government to issue debt in renminbi.

Even the European Central bank is debating to include renminbi in its official reserves, while politicians the world over are sounding not-so-subtle warnings that a new non-dollar monetary system is needed.

Nothing goes up or down in a straight line. And given how volatile Europe and the global economy continue to be, the dollar may certainly be in for its surges and bumps in the coming months.

But over the long-term it’s glaringly obvious where this trend is going: the rest of the world no longer wants to rely on the US dollar, and they’re making it a reality whether the US likes it or not.

*  *  *

And now, no lesser oil-producing state than controversialQatar has signed an agreement too.. seemingly opening up the door to Petrodollar panic… (as The Examiner reports)

The petro-dollar system is the heart and soul of America’s domination over the global reserve currency, and their right to make all nations have to purchase U.S. dollars to be able to buy oil in the open market. Bound through an agreement with Saudi Arabia and OPEC in 1973, this de facto standard has lasted for over 41 years and has been the driving force behind America’s economic, political, and military power.

But on Nov. 3 a new chink in the petro-dollar system was forged as China signed an agreement with Qatar to begin direct currency swaps between the two nations using the Yuan, and establishing the foundation for new direct trade with the OPEC nation in the very heart of the petro-dollar system.

While this new agreement between China and Qatar is only for the equivalent of $5.7 billion over the next three years, Qatar becomes the 24th nation to open its Forex market to the Chinese currency, and solidifies acceptance of the Yuan as a viable option for the future in the Middle East.

China’s central bank announced Monday that it has signed a currency swap deal worth 35 billion yuan (about 5.7 billion US dollars) with the central bank of Qatar.

The three-year deal could be extended upon agreement by the two sides,said a statement on the website of the People’s Bank of China (PBOC).

Also on Monday, the two sides signed a memorandum of understanding on Renminbi clearing settlement in Doha. China agreed to extend the RMB Qualified Foreign Institutional Investor scheme to Qatar, with an initial quota of 30 billion yuan.

The deal marked a new step forward in financial cooperation between the two countries, and will facilitate bilateral trade and investment to help maintain regional financial stability, the statement said. – China Daily

It is perhaps no coincidence that the term for the new agreement is set for three years, and is within the exact time frame being predicted by the director of the Finance Institute under the Development Research Center of the State Council, Zhang Chenghui for the Renminbi to become fully convertible in the global financial system.

The need for new markets and a more stable trade currency in Qatar could be tied to a new report issued last week by French bank BNP Paribas which showed that petro-dollar recycling has fallen to its lowest levels in 18 years, signifying that even oil producing nations in the Middle East are finding it difficult to trust the U.S. dollar, and facilitate its use in trade due to its depreciation since the advent of the Federal Reserve’s massive QE programs.

Nearly every week now, China, Russia, or one of the BRICS nations are finalizing agreements that supersede the old system of dollar trade and reliance on the petro-dollar system. And as many countries begin to reject the dollar due to the exported inflation that is growing in nations that are relegated to having to hold them for global oil purchases, alternatives such as the Chinese Yuan will become a more viable option, especially now that the Asian power has taken over the top spot as the world’s biggest economy.

*  *  *

The demise of Petrodollar flows…

 

 

 

end

Ukrainian currency crashes: it is now close to 16 UAH. per dollar.

If the Ukraine defaults, then credit default swaps will no doubt blow up our western bankers;

(courtesy zero hedge)

Ukraine Currency Crashes After Senior EU Official Says “The Ukrainians Are Manipulating Us”

Submitted by Tyler Durden on 11/11/2014 09:32 -0500

The much discussed tumble in the Russian ruble (or as Japan would call it “mission accomplished” if its was the Yen instead of the Ruble) may have stabilized somewhat, and judging by the Russian central bank’s response to no longer intervene in the FX corridor-setting market on a daily basis, Russia is hardly too concerned by the impact to the economy as a result of the beating its currency has taken, but where Putin may have brushed off the “speculative” attack on its currency for the time being, things for Russia’s western adversary, the Ukraine – the country whose economy is in a state of near terminal collapse and which unlike Russia doesn’t have massive raw materials to fall back on – are just starting to go bump in the night.

As has been the case for nearly a year, the Ukraine has been on life support by its “western allies” ever since theVictoria Nuland/US State Department/CIA catalyzed coupearly in the year. The problem is that those same “allies” now look like they have had enough of their “alliance” and are about to pull the “blank check” rug.

According to Reuters, nearly a year on from the first “EuroMaidan” protests that would topple the pro-Moscow president who had spurned an EU trade deal, some in Brussels are disillusioned by the experience of helping Ukraine. EU generosity in waiving import duties and funding gas supplies from Russia may be being abused, they say.

Corruption in Ukraine? Unpossible. But wait, it gets better:

Some in Ukraine’s elite may be colluding with Russia, even as fighting in the east has begun to escalate again.

If true, this will be the biggest stunt a Russian leader has pulled since Khruschev banging on the desk in the UN with his shoe.

And the punchline:

“The Ukrainians are manipulating the EU,” a senior EU official involved in negotiations told Reuters, saying the bloc was “waking up” to a need to better defend its own interests.

 

 

You mean those poor European taxpayers, raped for years to bail out insolvent Eurozone nations because, you know, “political capital”, are now directly and indirectly funding Putin’s extravagant habits?

Brilliant.

“There may be, in certain sections of the Ukrainian government, an interest in colluding with the Russians and instrumentalizing to a certain extent the EU,” he added.

Such views are dismissed as “absolute nonsense” by Ukraine’s ambassador to the EU, Kostiantyn Yelisieiev. He condemned talk of secret deals between Kiev and Moscow to exploit Western fears for profit as part of “Russian propaganda” and said he had full confidence in continued cooperation with the European Union.

In public, there is solid EU support for the newly elected president and parliament in the face of Russian hostility – a position new European Commission President Jean-Claude Juncker will stress when he visits Kiev, perhaps as early as this month.

And there is unanimous, personal admiration among officials and diplomats for ordinary Ukrainians’ courage on the streets, and a will to help them consolidate democracy and prosperity.

Yet in private, endemic post-Soviet corruption, the power of business “oligarchs” and suspicions of lingering Ukrainian collaboration with supposed enemies in Moscow lead some in Brussels to question the future of current levels of EU backing.

“Maybe people fell for this ‘poor little Ukraine’ line,” one EU diplomat said. “But they’re not so naive. They’re waking up.”

 

 

Well, if they indeed are, it also means any future IMF, or US aid, to the Ukraine is over. And here comes the bailouter’s remorse:

Amid some regret at the way the EU’s drive to conclude its Association Agreement with Ukraine ended up provoking conflict with Russia, there is sympathy in Brussels for Poroshenko, the confectionery magnate and long-time minister elected to succeed the ousted, Moscow-backed Viktor Yanukovich six months ago.

“You can’t blame him for playing a weak hand as best he can in his own national interests,” one EU diplomat said of the man who was feted as guest of honor at an EU summit in June.

At the same time, there is a concern not to write blank cheques to Ukraine at a time of austerity at home.

 

 

Which may explain why the Ukraine economy just entered the endspiel part judging by what happened to its currency overnight.

end