Markets ‘Get Ready’ for war By Jasper Lawler, Head of Research LCG – London Capital Group

 

Markets were back to a more defensive posture. Escalating tensions between the US and Russia in Syria has put the two nations on the brink of war. It goes to show it’s all relative. If there’s a choice of war, most would prefer a trade war to armed conflict. European markets were in the red and Wall Street opened lower as investors sought a haven in government bonds. As 10-year treasury yields fell, a jump in US consumer prices in March saw shorter-dated yields rise, creating the flattest yield curve since the financial crisis.

Unfortunately, Syria is in a perpetual state of war and it is not usually something that would factor into an investment decision. World super powers backing either side of the conflict always made Syria a big risk factor but today those risks are starting to manifest. Alexander Zasypkin, Russia’s ambassador to Lebanon has said US missiles fired at Syria would be shot down. US President Trump tweeted warning Russia to ‘get ready’ for the missiles regardless.  

Trump’s tweet reportedly boke national security procedure, and we think that goes some way to explain why markets have not reacted more violently. Investors have gotten so used to bombasts from Trump that there’s a belief he is aiming for ‘a deal’, even when it comes to war.

Financial Markets & Political Commentary

 

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About the author

Jasper delivers regular commentary, seminars and webinars on market news, trading analysis, strategy and psychology. He is regularly interviewed by BBC News, Bloomberg, CNBC and Sky News, and has featured in The Times, Guardian and Daily Telegraph. Jasper hosts a weekly charting analysis webinar. He is qualified as a Chartered Market Technician (CMT) with the Market Technician Association, and has a degree in Finance and Economics.