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EMEA EM Express: Pro-Russian separatists in Donetsk refuse to vacate occupied buildings

FXStreet (Łódź) - The talks between Ukrainian, Russian, EU and US leaders in Geneva, aimed at finding a solution to the Ukraine crisis ended in an agreement that efforts will be made to reach a peaceful settlement. The deal delays the imposition of further sanctions on Russia by the West, but this state of affairs may not last long as pro-Russian separatists have already refused to comply with the agreement.

Under the deal, pro-Russian militants are required to disarm and cease the occupation of government buildings in Ukraine, in exchange for amnesty. Kiev on the other hand is to undertake public consultations on constitutional reform.

The success of the agreement has been put into question already on Friday however, as the pro-Russian separatists occupying government buildings in Donetsk refused to vacate them.

“We will lay down our weapons only if the National Guard and other Ukrainian military structures stop attacking us, and if we and our families feel safe,” one of the militants leaders told the Interfax news agency today.

Meanwhile, Ukrainian PM Arseny Yatsenyuk said that the parliament was prepared to approve the amnesty bill for protesters, but that he wouldn't hope for a definite resolution of the crisis.

Many voices were raised asking about the effectiveness of the EU and US response to Russia's aggressiveness and their unwillingness to use force. The BBH Global Currency Strategy Team believe that even though Ukraine and NATO have already responded to Russia's moves, by strengthening forces in the region, no such thing should be expected from the US, which “will not sanction a confrontation with Russia over areas in Europe where it does not have a defense treaty or any strategic interests.”

Despite the skepticism about the validity of the agreement on Ukraine, Russian shares rose by 2.2% in Friday, which is the biggest increase in three weeks.

Economic data

The only piece of important EMEA data released on Friday was Hungary's Gross Wages, which showed 1.7% growth year-on-year in February, up from the 0.9% rise recorded the previous month.

Technicals

The Russian ruble fell against the central bank’s basket of dollars and euros to 41.6574 on Friday, following a 1.4% increase on Thursday. USD/RUB is up 0.25% at 35.5617.

On Thursday the USD/RUB daily FXStreet Trend Index was slightly bearish, and the OB/OS Index neutral. RSI was at 45 at the last close and rose to 51 so far today. The Daily 2-StDev Volatility Bandwidth was shrinking at 3290 pips, with ATR (14) expanding at 4105 pips. The 1D 200 SMA was at 33.6023, while the 1D 20 EMA was at 35.7553.

AUD/USD flat on the day, headed for weekly losses

As most crosses in the FX market, the AUD/USD has spent the day in quiet consolidation amid thin volume and lack of interest.
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