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Oil and Gold surge on Syria tensions; Stocks holding up fairly well

Summary:

  • Oil spikes to 3-year high despite DOE build
  • Syrian tensions outweigh inventory data; Gold strongly higher too
  • Stocks holding up fairly well considering; earnings in focus
  • Sterling rising despite industrial data
  • Is Bitcoin bubble already popping?

The main theme for markets today has been the increase in tensions between the US and Russia in Syria, with Trump firing off a series of inflammatory tweets threatening missile strikes. One of the instruments that this can be most easily seen is Oil, with the price of crude hitting its highest since December 2014 despite a large DOE inventory build. 

Another market showing clear moves on this news is Gold, with the precious metal rallying above $1260 and trading not far from its highest level of the year. On the data front a slightly soft CPI reading compared to expectations has also boosted Gold, with the precious metal rallying more than $20 on the day.

Given the market reaction in Oil and Gold it is perhaps a little surprising that stocks have held up fairly well despite the news. There has been a little selling seen in European indices such as the DE30, but the US markets in particular are resolute with the US500 higher on the day. One area that indices traders will be focusing on going forward is earnings with US large caps to begin reporting their latest results shortly.  

The Pound has enjoyed a solid run lately and on a trade weighted basis today rose to its highest level since June 2016 - shortly after the Brexit vote. The gains come despite the newest set of the industrial data from the UK economy which turned out to be downbeat as manufacturing production shrank in February for the first time in 11 months. According to the ONS data UK manufacturing production shrank 0.2% in February compared to the prior month while industrial production rose just 0.1% vastly missing the consensus set at 0.4%.

While some cryptocurrency pundits suggest that the bear market may have already come to an end, Bank of America researchers present a different point of view. According to their note released on Sunday Bitcoin, being one of the greatest asset price bubbles in history, is finally popping as the virtual currency has already fallen more than 60% since its peak reached in December last year. 

  

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