UK & Europe Archives - Page 23 of 88

September 5, 2014

European ceasefire

Neil MacFarquhar reports in The New York Times:

After five months of intensifying combat that threatened to rip Ukraine apart and to reignite the Cold War, the Ukrainian government and separatist forces signed a cease-fire agreement on Friday that analysts considered highly tenuous in a country that remains a tinderbox…..

The agreement resembles, almost verbatim, a proposal for a truce issued by President Petro O. Poroshenko in June.

It includes amnesty for those who disarm and who did not commit serious crimes, and the exchange of all prisoners. Militias will be disbanded, and a 10-kilometer buffer zone — about six miles — will be established along the Russian-Ukrainian border. The area will be subject to joint patrols. The separatists have agreed to leave the administrative buildings they control and to allow broadcasts from Ukraine to resume on local television….

There appears plenty of skepticism as to whether the ceasefire will hold… and whether Russian forces will withdraw, but markets welcomed the announcement.

Germany’s DAX is testing resistance at 9700/9800. Breakout would indicate a fresh advance, while follow-through above 10000 would confirm a target of 11000. Recovery of 13-week Twiggs Money Flow above zero suggests selling pressure is easing. Retreat below 9250, however, would warn of another test of primary support at 9000.

DAX

* Target calculation: 10000 + ( 10000 – 9000 ) = 11000

The S&P 500 rallied above 2000. Follow-through above 2010 would confirm an advance to 2100*. Sideways movement on 21-day Twiggs Money Flow, however, suggests further consolidation. Reversal below 1990 is unlikely, but would warn of another correction.

S&P 500

* Target calculation: 2000 + ( 2000 – 1900 ) = 2100

CBOE Volatility Index (VIX) remains low, typical of a bull market.

S&P 500 VIX

Shanghai Composite Index, responding to PBOC stimulus, broke resistance at 2250 to signal a primary up-trend. Rising 13-week Twiggs Money Flow indicates accelerating buying pressure. Target for the advance is 2500*. Reversal below 2250 is unlikely, but would suggest further consolidation between 2000 and 2250.

Shanghai Composite Index

* Target calculation: 2250 + ( 2250 – 2000 ) = 2500

The ASX 200 broke short-term support at 5620, but with both US and Chinese markets entering a bull phase retracement is likely to be short-lived. Breakout above 5680 would confirm an advance to 5850*. Bearish divergence on 21-day Twiggs Money Flow warns of medium-term selling pressure, but a trough above zero would indicate that buyers are back in control. Reversal below 5540 is unlikely, but would warn of a test of primary support.

ASX 200

* Target calculation: 5650 + ( 5650 – 5450 ) = 5850

September 3, 2014

Footsie resilient while Euro, DAX falter

The Euro is in a primary down-trend, having broken support at $1.35. Declining 13-week Twiggs Momentum (below zero) confirms. Expect short-term support at $1.31 on the weekly chart, with long-term support at $1.27/$1.28.

Euro

Germany’s DAX encountered resistance below 9700/9800 and 13-week Twiggs Money Flow below zero warns of selling pressure. Reversal below 9300 would warn of another test of primary support at 9000.

DAX

Dow Jones Euro Stoxx 50 found similar resistance at 3200. A 13-week Twiggs Money Flow trough above zero, however, would indicate buying pressure, while a fall below zero would warn that sellers dominate. Reversal below 3100 would warn of another test of primary support at 3000.

Dow Jones Euro Stoxx 50

The Footsie shows more resilience, testing long-term resistance at 6850/6900. 13-Week Twiggs Money Flow oscillating above zero indicates long-term buying pressure, but there is a major psychological barrier at 6900/7000 (the 1999 high) that has to be overcome. Breach of support at 6500 is unlikely, but would warn of a reversal.

FTSE 100

* Target calculation: 7000 + ( 7000 – 6000 ) = 8000

August 30, 2014

Luc Vancraen: Can the EU still prevent an open war between Ukraine and Russia?

Interesting proposal from Luc Vancraen, an entrepreneur in Kyiv who holds a masters degree from Boston University:

If there is no Novorussia today it is because of the ferocious fighting of the Ukrainian armed forces. If the EU wants the Ukrainians to stop fighting after Donbas is liberated it will have to come up with a plan that convinces even the volunteer battalions that it is just a matter of time before Crimea returns to Ukraine.

The only way I can see this happen is through a Crimean Occupation Tax on all energy imported from Russia into the EU and all other countries that want to participate. President Putin will not like this tax at all but strangely enough it might be enough for him to belief that this could stop the Ukrainian army. It buys him time and he can speculate on convincing the EU to drop it later through good behaviour even though this won’t be easy with a name like this.

The tax will be paid on all Russian gas, oil and coal sold in the EU. Who pays this tax? Initially it will be EU citizens through their energy bills. This allows Putin through the Russian propaganda to trivialise these sanctions and to laugh with the stupidity of the EU that sanctions itself. But don’t underestimate the creativity of the energy companies. They will find other suppliers and this helps the EU to reduce dependency from a supplier they can no longer trust. Russia will be faced very fast with a serious dilemma. Lowering energy prices to include the tax so that it remains competitive with suppliers that don’t need to pay this or totally losing the biggest customer on earth. Simulations show that after just two years it is Russia that is paying this tax to avoid totally losing the EU as a customer.

August 30, 2014

Garry Kasparov: It’s a War, Stupid! | TIME

From Gary Kasparov:

As always when it comes to stopping dictators, with every delay the price goes up. Western leaders have protested over the potential costs of action Ukraine at every turn only to be faced with the well-established historical fact that the real costs of inaction are always higher. Now the only options left are risky and difficult, and yet they must be tried. The best reason for acting to stop Putin today is brutally simple: It will only get harder tomorrow.

August 30, 2014

The Great Myth: World War I Was No Accident | The Diplomat

From Zachary Keck:

…As the wise philosopher Rob Farley once cautioned in these pages, “accidental wars rarely happen,” and instead are usually the result of deliberate state policy. And in this regard, WWI is no exception, at least according to Dale C. Copeland.

In his instant classic, Origins of Major Wars, Copeland developed a theory he called “dynamic differentials theory” to explain the causes of great power conflicts. To slightly oversimplify, dynamic differentials theory argues that declining states initiate wars when they are still clearly militarily superior but they believe they are in deep and irreversible decline relative to the rising state.

In such a situation, the leaders of the declining state come to see war as the only way to prevent the rising state from overtaking it as the most powerful nation in the system, thereby becoming a major security threat. Dynamic differentials theory posits that these leaders are most likely to initiate war when they believe they have maximized their relative power– that is, when they believe their relative military power is peaking and delaying war will only allow the rising nation to grow relatively stronger….

August 30, 2014

EU moves to ramp up Russia sanctions | Al Jazeera

From AlJazeera:

French President Francois Hollande stressed that a failure by Russia to reverse a flow of weapons and troops into eastern Ukraine would force the bloc to impose new economic measures.”Are we going to let the situation worsen, until it leads to war?” Hollande said at a news conference. “Because that’s the risk today. There is no time to waste.”

August 30, 2014

Tusk new president of European Council | NYTimes.com

From ANDREW HIGGINS and NEIL MacFARQUHARAUG:

Capping weeks of haggling among capitals and rival political groups, leaders on Saturday evening named Prime Minister Donald Tusk of Poland to replace Herman Van Rompuy as the president of the European Council, which sets the agenda for summits and helps represent the union at international gatherings. He is the first Eastern European selected for such a senior position, and his appointment, at a time of growing tensions with Russia, emphasized the growing clout of new members that, having shaken off decades of subservience to Moscow, generally favor a more robust approach to Russia than the union’s older members in the West.

August 29, 2014

War in Europe

Vladimir Putin has escalated the conflict in Eastern Ukraine with new incursions of tanks backed with artillery, anti-aircraft missile systems and up to 15,000 Russian troops. Intent on seizing as much territory as possible, he is banking on the US/European coalition responding with another slap on the wrist. Each weak response has only made Putin bolder. But where he may miscalculate is that the coalition is aware that its “stick-and-carrot” policy has failed and will be looking for a new approach.

Willingness of the Europeans to endure immediate economic pain in the belief that this will avert a long-term calamity is yet to be tested. Success will depend on France, Spain and Italy’s support for their Northern and Central European neighbours, who face a more immediate threat.

A significant step-up in sanctions is likely and the initial response from European markets will be negative. Sanctions are a two-edged sword and likely to hurt Europe almost as much as they do Russia. But NATO rearmament in the medium-term would somewhat offset the initial cost. Never underestimate the stimulus effect of war on local industry — provided the war is fought outside one’s borders

Germany’s DAX is running into stiff resistance as it approaches 9750. And 13-week Twiggs Money Flow below zero warns of selling pressure, threatening a reversal. Retreat below 9250 would strengthen the signal and failure of support at 8900/9000 would confirm a primary down-trend.

DAX

* Target calculation: 9000 – ( 10000 – 9000 ) = 8000

Dow Jones Euro Stoxx 50 reversal below 3100 and 13-week Twiggs Money Flow below zero would add further weight to the (bear) signal.

Dow Jones Euro Stoxx 50

* Target calculation: 3000 – ( 3300 – 3000 ) = 2700

The S&P 500, unfazed by recent developments in Europe, broke resistance at 2000 to signal an advance to 2100*. A 21-Day Twiggs Money Flow trough above zero indicates rising (medium-term) buying pressure. Reversal below 1990 is unlikely, but would warn of another correction.

S&P 500

* Target calculation: 2000 + ( 2000 – 1900 ) = 2100

CBOE Volatility Index (VIX), shown here on a ten-year chart, indicates low risk typical of a bull market.

S&P 500 VIX

Shanghai Composite Index, responding to PBOC stimulus, is testing resistance at 2250. Rising 13-week Twiggs Money Flow indicates medium-term buying pressure. Breakout would confirm a primary up-trend, signaling an advance to 2500*. Respect of resistance is less likely, but would suggest further consolidation.

Shanghai Composite Index

* Target calculation: 2250 + ( 2250 – 2000 ) = 2500

The ASX 200 is testing resistance at 5650. Continued strength in US and Chinese stocks would improve the chance of an ASX 200 breakout, suggesting an advance to 5850*. Bearish divergence on 13-week Twiggs Money Flow — shown here on a monthly chart — continues to warn of long-term selling pressure. But failure to cross below zero would negate this and completion of another trough above zero would indicate that buyers are back in control. Reversal below 5450 is unlikely, but would warn of a test of primary support.

ASX 200

* Target calculation: 5650 + ( 5650 – 5450 ) = 5850

August 27, 2014

The Russians Are Coming | Michael Weiss

Chilling how accurate Michael Weiss’ March 28 analysis in Foreign Policy is proving to be.

RT @michaeldweiss: In late March I predicted Russia would invade east Ukraine. Here's why: http://t.co/FCDeLm2Va5

— Blogs of War (@BlogsofWar) August 27, 2014

August 26, 2014

DAX surges

Germany’s DAX surged after a brief test of support at 9250/9300. Recovery of 21-Day Twiggs Money Flow above zero indicates short-term buying pressure. A trough above the zero line would reflect medium-term buying pressure. Expect resistance at 9700/9800.

DAX

* Target calculation: 9750 + ( 9750 – 9000 ) = 10500

Dow Jones Euro Stoxx 50 also surged, indicating a test of 3250 on the weekly chart. Completion of a 13-week Twiggs Money Flow trough above zero would indicate long-term buying pressure. Reversal below 3100 is unlikely, but would warn of another test of primary support.

Dow Jones Euro Stoxx 50

* Target calculation: 3150 + ( 3150 – 3000 ) = 3300

The Footsie faces strong resistance between 6750 and 7000, as illustrated on the quarterly chart. 13-Week Twiggs Money Flow oscillating above zero indicates a healthy up-trend, but this is a major psychological barrier to overcome. Breach of support at 6400/6500 is unlikely, but would warn of a reversal.

FTSE 100

* Target calculation: 700 + ( 7000 – 6000 ) = 8000