Climbing the wall of worries


No major flight to safety despite Syrian air strikes; markets are viewing this as a one-off
Chief Investment Office16 Apr 2018
Photo credit: AFP Photo


Over the weekend, the US, French, and British military launched a series of air strikes on Syria in retaliation to Syrian President Bashar al-Assad’s usage of chemical weapons. But while Syria’s chemical weapons facilities were targeted, the regime’s military infrastructure remained largely unscathed. Following the US-led air strikes, the Trump Administration has also vowed to impose new sanctions on Russia for its support of the Assad regime.

Despite simmering geopolitical tension, the reaction of risk assets is, however, extremely subdued. The classic flight to safety was clearly not evident. While the yen registered slight gains (as at time of writing), gold fell. Similarly, West Texas Intermediate (WTI) crude oil price is also down while US futures are pointing to gains on the S&P 500 Index when the market reopens. This suggests that the market is perceiving the US-led air strike as a one-off event at this juncture.


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