Stock Markets – Daily Note – 10Apr

Ger30, UK100 and SP500 are CFD’s, written over the Dax30, Footsie100 and S&P500 Index futures:

In the pre-opening, the European markets traded in a slight rise, despite the environment of uncertainty and fears of the geopolitical tensions. In Italy, a two-day meeting of G7 foreign affairs ministers will begin today, in which Europe and Japan will seek clarity on the current US position on the conflict in the Middle East. In France, the official campaign for the presidential elections begins today, with the first round of these elections scheduled for April 23 and the second round for May 7.

The US market ended in mixed directions as investors reacted to a mixed employment report, statements by a Fed member as well as the geopolitical environment, after the US launched a military offensive against Syria. The employment report showed that only 98 000 jobs were created during the month of March, despite the unemployment rate falling to the lowest of the last 10 years, from 4.70% to 4.50%. One of the themes of the week will be the aftermath of the US attack on a Syrian base as a warning after the country’s regime allegedly attacked a resistance-controlled city with chemical weapons. The Trump Administration seemed to have a closer relationship with President Putin compared to the Obama administration but last week’s attack could jeopardize that relationship. The complexity of the situation indicates to the fragility of the balances on the relations of its actors, which in turn be changed to the least incident. From the point of view of financial markets, the best way to keep track of investors’ risk perception is through the evolution of Gold and Petroleum. An appreciation of these assets may signal a correction in risk assets.

European stock markets ended in different directions. The Japanese market closed positive, despite escalating geopolitical tensions and with exporting companies benefiting from the depreciation of the Yen. Meanwhile, Bank of Japan Governor Kuroda reiterated that the current monetary policy will continue until stable inflation at 2% is achieved.