Talking Points:

• A Crimea referendum vote on joining the Russian Federation is tentatively scheduled for Sunday

• This event and its fallout carry significant implications for emerging markets and broader sentiment

• How far up the risk curve does this event need to drive to collapse the S&P 500 and all risk assets?

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Confidence and the 'fear of missing out' mentality applied to risk trends have weakened materially this past week. What separates us from another pause and a real unwind in risk is the catalyst. As was the case with late January's sell off, the threat to the global markets is one of the most risk-sensitive asset groups: emerging markets. A scheduled referendum vote in Crimea is a focal point for possible sanctions and disruption in the worldwide sentiment cycle. What makes this situation particularly troubling is that the market is not as 'prepared' with this issue as it was with previous threats. We discuss the Crimea standoff in context of the bigger sentiment picture for global trading in the Weekend Strategy Video.

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