{"id":62916,"date":"2018-04-12T12:06:43","date_gmt":"2018-04-12T12:06:43","guid":{"rendered":"https:\/\/www.biphoo.com\/bipnews\/?p=62916"},"modified":"2018-04-12T12:06:43","modified_gmt":"2018-04-12T12:06:43","slug":"easing-middle-east-anxiety-helps-stocks-recover","status":"publish","type":"post","link":"https:\/\/www.biphoo.com\/bipnews\/business\/easing-middle-east-anxiety-helps-stocks-recover.html","title":{"rendered":"Easing Middle East anxiety helps stocks recover"},"content":{"rendered":"

Easing Middle East anxiety helps stocks recover<\/span><\/strong><\/h2>\n

European shares began to recover on Thursday as Wall Street futures pointed to a positive U.S. open, with investors\u2019 anxiety over a threatened clash between Western powers and Russia in Syria easing ahead of a strong U.S. earnings season.<\/span><\/p>\n

The ratcheting up of geopolitical tensions over an alleged chemical attack by Syrian government forces kept bond yields low, while crude prices eased back, having surged to 2014 highs as a result of political risk in the oil-rich region.<\/span><\/p>\n

MSCI\u2019s world equity index .MIWD00000PUS fell for the second day, while European shares managed a 0.3 percent gain.<\/span><\/p>\n

Attention in Europe turned to the minutes of the March European Central Bank meeting expected at 1130 GMT. Investors hoped for greater clarity on the bank\u2019s timing for the unwinding of quantitative easing.<\/span><\/p>\n

Losses among European stocks were limited by strong oil and gas shares .SXEP, boosted by this week\u2019s jump in crude prices, and sentiment also improved ahead of Wall Street\u2019s open with futures up 0.4 to 0.5 percent. 1YMc1 ESc1 NQc1<\/span><\/p>\n

Investors were anticipating very strong results from U.S. corporates in the upcoming quarterly earnings season, keeping them from turning overly bearish on stocks despite political risks.<\/span><\/p>\n

U.S. President Trump amended on Thursday his earlier warning of a swift military strike on Syria, writing on Twitter \u201cit could be very soon or not so soon at all\u201d, sending the dollar .DXY higher.<\/span><\/p>\n

Trump had declared on Wednesday that missiles \u201cwill be coming\u201d in Syria, taunting Russia for supporting Syrian President Bashar al-Assad after the suspected chemical attack in Douma. Damascus and Moscow have denied any responsibility.<\/span><\/p>\n

His comments raised the prospect of direct conflict over Syria for the first time between the two world powers backing opposing sides in the seven-year-old civil war.<\/span><\/p>\n

Heightened geopolitical tensions have piled pressure on investors already rattled by a trade spat between the U.S. and China and a generally more volatile market environment.<\/span><\/p>\n

\u201cWe are seeing this regime shift take place in terms of drivers to volatility,\u201d said Norman Villamin, chief investment officer of private banking at UBP in Zurich.<\/span><\/p>\n

Villamin expects the VIX .VIX gauge of S&P 500 volatility to stay around the 20 mark – roughly twice its average level last year.<\/span><\/p>\n

\u201cIf your portfolio today looks like it did last year, then you probably haven\u2019t done enough to adapt your exposure,\u201d he said.<\/span><\/p>\n

Crude prices eased back after three sessions of strong gains took them to their highest levels since late 2014 on Wednesday.<\/span><\/p>\n

U.S. crude futures CLc1 last traded down 0.2 percent at $66.66 a barrel, having risen 7.4 percent so far this week. They traded as high as $67.45 on Wednesday.<\/span><\/p>\n

Brent LCOc1 declined 0.5 percent to $71.73 a barrel, having touched a high of $73.09 on Wednesday.<\/span><\/p>\n

European government bond yields remained low as caution dominated ahead of ECB minutes and speeches from several ECB members. Germany\u2019s 10-year Bund yield rose 1 basis point to 0.512, staying near the one-week low it hit on Wednesday.<\/span><\/p>\n

\u201cInvestors are really torn on bonds right now because they know the economy is strong and inflation is coming up,\u201d said UBP\u2019s Villamin.<\/span><\/p>\n

He started adding to government bonds last month for the first time since 2016, hoping to benefit from bonds\u2019 relatively low volatility.<\/span><\/p>\n

Safe-haven gold XAU= slipped 0.5 percent from an 11-week high after minutes from the Federal Reserve\u2019s policy meeting on Wednesday raised expectations the U.S. could raise rates at a faster pace.<\/span><\/p>\n

Currency markets settled as some strong risk-averse moves unwound.<\/span><\/p>\n

The dollar index .DXY rose 0.2 percent to a session high after Trump’s latest comments, though it was still near a two-week low. The safe-haven yen JPY= edged lower to 107.09 against the dollar.<\/span><\/p>\n

The euro EUR= meanwhile fell back 0.3 percent to $1.2329 ahead of the ECB meeting.<\/span><\/p>\n

Russia\u2019s rouble edged up for a second day after heavy selling due to new punitive sanctions by the United States.<\/span><\/p>\n

It traded around 61.69 to the dollar RUB=, still down more than 7 percent this week.<\/span><\/p>\n

The Turkish lira TRY=, which has been highly sensitive to developments in neighboring Syria, recovered slightly to trade at 4.1223 per dollar after hitting a record low of 4.1920 on Wednesday.<\/span><\/p>\n

The lira is down 2 percent so far this week, also hit by concern about inflation and the central bank\u2019s reluctance to tighten its policy.<\/span><\/p>\n

Worries about the Middle East have overshadowed budding optimism that Washington and Beijing will work out a compromise to avert a trade war following Chinese President Xi Jinping\u2019s speech on Tuesday.<\/span><\/p>\n

\u201cUnderneath the sabre-rattling, there\u2019s negotiations, so maybe that is a bit of a buying opportunity,\u201d said Gill Lakin, chief investment officer at Brompton Asset Management.<\/span><\/p>\n

Source:-https:\/\/www.reuters.com\/article\/us-usa-fed-minutes\/federal-reserve-policymakers-all-saw-strengthening-economy-inflation-minutes-idUSKBN1HI2UQ<\/span><\/p>\n

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