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Trading In Global Markets Is Dull Due To Geopolitics

April 12, 2017
By Anatol Thomas
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On Monday, the investors in the global markets refrained from involving in major trades, due to geopolitical policies in Korea and the Middle East. As a result, trading volumes were low and there were no significant large bets.

The dollar which was struggling to keep up its dominance in the market was strengthened, due to the increased expectations of interest rate hikes. The global Asian stocks are considered expensive, by a number of investors and they didn’t want to risk their capital at the moment.

The attack on Syria last week by the USA increased the global tension. Rex Tillerson, US Secretary of State has warned that the airbase strike is a warning to other countries such, as North Korea. In the forex market, the conflict risk has strengthened the dollar, which was further supported by the hawkish Fed comments. The oil prices enjoyed gains, as Brent Crude futures traded 0.7% higher and WTI crude futures gained 0.6%.

The European stocks also remained mostly unchanged, even though BHP Billiton increased by 5%. Elliot Management has urged BHP Billiton to consider a spin-off of the US operations. However, this didn’t result in a drastic change in the European stock market because of the political conditions in France. Investors suddenly gained more interest in government debt, instead of other assets. Euro which was gaining against the USD lost its pace, due to the increased borrowing cost of France. The popularity of Jean-Luc Melenchon in the French presidential election has also made the investors wary.