Thursday, March 28, 2019

Geopolitics continues to rule

Geopolitics continues to rule the roost in the world markets

Key trends in global stock markets are currently linked to the situation in the geopolitical arena, including increased tension in Syria and in the region of the Korean Peninsula.


Asian markets are preparing for a difficult week


Markets in Asia traded in different directions


Today's auction began mostly lower Asian stock markets, as the gain geopolitical risks prompted investors to seek safety tools for investment.


By continuing risk of rising tensions in the Middle East around Syria added a series of terrorist attacks in Egypt. The negative impact on the market and also had news from China about a corruption investigation against the chairman of the commission on insurance regulation.


Asian indices


Japanese Nikkei index up to 18 225 795.50 (+ 0.70%), Australian SP / ASX 200 rose to 5 912,88 (+ 0.86%), Kospi down to 2 133.32 (-0.86%), Hong Kong Hang Seng lost 0.5% to 24 256,00 and Shanghai Composite decreased by 0.5% to 3 270.12. Topix increased by 0.7% to 1 499.65 and MSCI - up to 97.93 (+ 0.14%).


Growth risks of conflict on the world stage in contrast to the most optimistic forecasts for the global economy over the past few years.


US markets are showing sharp volatility


Markets in the US closed neutral


On the last day of the last week the stock found in relatively high volatility in the US, as markets could not decide between the economic and geopolitical news.


S P 500 index decreased by 0.1% to 2 355.54, Dow Jones Industrial Average almost unchanged - 20 656.10 (-0.03%) as NASDAQ Composite - 5 877.81 (-0.02%).


The most attention attracted the markets on the number of employees outside the agricultural sector, which rose in March by 98 000 people. Decline in unemployment from 4.7% in February to 4.5% in March, did not have much impact.


US bonds


The yield on 10-year US Treasury bonds on Monday amounted to 2.38% after a short fall on Friday to 2.30%.


Markets are awaiting the start of the reporting season of American companies, which should revive the stock market. However, the focus of investors will be focused on the situation in world geopolitics, especially after the news that the United States sent aircraft carrier groups to the Korean peninsula.


European stocks rose after the US strike on Syria


In Euro zone rising energy sector


Rising oil prices, following the shelling of Syria by the United States, has led to skyrocketing oil stocks.


The energy sector had the strongest support for growing the index STOXX 600, which reached a 10-week high of 381.26. British FTSE reached 7 352.00 100 (+ 0.04%), French CAC lost 0.42%, down to 5 113.50 and German DAX lost 0.06% to 12 217.25.


Shares of the company Randgold Resources increased by 4,3%, Tullow Oil rose by 1.46% and Fresnillo, engaged in the precious metals mining increased in price by 1.8%.


Shares of the company BAE Systems, which specializes in defense and military technologies, have increased in price 2.4% after the use of Washington cruise missiles "Tomahawk" to strike on Syria.


The ECB supports the cautious market


In the real estate sector shares rose to fresh six-month highs on fears of growth, the ECB will be very cautious in terms of the implementation of measures to tighten monetary policy against the backdrop of inflation lower than projected.


Geopolitics has taken control of oil prices


Oil continues to rise


Crude oil futures Asian session gains after Friday's jump out of the US on Syria missile strike.


As of 11:40 MSK June Brent futures were trading at $ 55.66 per barrel (+ 0.76%) and WTI for May delivery in the area of ​​$ 52.60 (+ 0.69%).


Geopolitics remains a key factor in the behavior of the oil market, and affects not only the Middle East but the entire Pacific region as a whole.


OPEC report


Tuesday released a monthly report of OPEC to reduce oil production. In addition, this week the US Department of Energy will publish monthly short-term outlook for the domestic oil industry, while China will reveal data on the March imports of "black gold".


Gold declines against the dollar strengthening


A stronger dollar weighs on gold


Precious metal began today's trading lower on a strengthening dollar after reaching a five-month high last week.


As of 11:50 MSK spot gold traded at $ 1 253.68 (-0.05%), and the yellow metal futures decreased by 0.2% to 1 $ 254.30 per troy ounce.


A stronger dollar tends to reduce the attractiveness of precious metals as an alternative asset. As a result, products that are linked to the US currency less attractive for holders of other currencies.


The market of precious metals is reduced


Troy Ounce Silver decreased by 1.21% to $ 17.93, platinum fell to $ 955.55 (-0.73%), and palladium - 0 to $ 798.7 (-0.62%).



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