After adopting a wait and see attitude for several days after the Syrian air strikes, markets turned defensive last night. There were significant moves in safe haven assets such as gold, Yen and US Bonds. While there is no immediate threat to international financial flows or global commerce, the assertive positions of the US, Russia and North Korea has seen markets begin to take insurance against the possibility that geo political risks will escalate.
The US stock market closed broadly unchanged last night but this was only after rallying off lows that saw it break below the trading range that’s been firmly in place so far this month. Despite the firm close, this downside break indicates a degree of investor brittleness over the geopolitical situation. At the end of the day, US stocks appeared to give greatest weight to positive expectations for the upcoming profit reporting season, delivering a neutral lead for the local market.
While global equity markets have been somewhat stalled this week, the Australian market has outperformed with solid gains over the past 2 days and a clear break into new high ground for the year. A key question for traders will be whether this independent upward momentum continues in the face of global nervousness today.
The oil market continued to rise in advance of this week’s US production data, suggesting that energy stocks will again be a source of support for the ASX 200 index.
CMC Markets is an execution-only service provider. The material (whether or not it states any opinions) is for general information purposes only, and does not take into account your personal circumstances or objectives. Nothing in this material is (or should be considered to be) financial, investment or other advice on which reliance should be placed. No opinion given in the material constitutes a recommendation by CMC Markets or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person.
CMC Markets Singapore may provide or make available research analysis or reports prepared or issued by entities within the CMC Markets group of companies, located and regulated under the laws in a foreign jurisdictions, in accordance with regulation 32C of the Financial Advisers Regulations. Where such information is issued or promulgated to a person who is not an accredited investor, expert investor or institutional investor, CMC Markets Singapore accepts legal responsibility for the contents of the analysis or report, to the extent required by law. Recipients of such information who are resident in Singapore may contact CMC Markets Singapore on 1800 559 6000 for any matters arising from or in connection with the information.