Risk aversion continues from yesterday as we approach the weekend. Nikkei -3.3.%, MICEX (Russia) -4%, DAX futures -1% Commodities have remained relatively stable despite the movements in other markets WTI and Gold (charts below) have hardly reacted There is increasing nervousness ahead of Sundays referendum in Crimea. G7 leaders said they would not recognize the outcome of the referendum, while Russia has maintained that they were prepared to "mirror" any sanctions There were reports of Russian military "training exercises" along the border yesterday Key events to watch today: 1) Russian Foreign minister Sergei Lavrov and US Secy of State John Kerry meet in London. This is a last-ditch effort to de-escalate the situation 2) Central Bank of Russia meeting today at 9:30 where Bloomberg survey expects no change Swaps curve is pricing in over a 100bp hike. How will the central bank react to FX pressures? Ongoing tensions justify a cautious approach into the weekend. Tactically go long 1m WTI Calls 101 ($1) and short DAX Russia 5 swa • n r .385 u• Last Price 9.3850 T High on 03/14/14 9.3850 9.0000 Average 7.2356 1 Low on 08/08/13 6.8600 8.5000 8.0000 7.5000 7.0000 Mar Jun Sep Dec ar 2013 2014 RRSWMS Curncy (RUB SWAP VS M0SPRIME SYR) Daily 14MAR2013-14MAR2014 Copyright? 2014 Bloomberg Finance L.P. 14-Mar-2014 07:18:48 WTI Crude Oil future Apr14 CONFIDENTIAL — PURSUANT TO FED. R. CRIM. P. 6(e) DB-SDNY-0123419 CONFIDENTIAL SDNY_GM_00269603 EFTA01461392