Stock markets initially fell on news of the US missile strikes in Syria, but recovered quickly once US officials indicated there would be no escalation.
Oil prices remain near one-month highs and the dollar recovered lost ground, but predictably precious metals miners’ stocks rose as did the gold price as investors took fright and piled into safe haven assets.
The strikes were limited and targeted, although reaction to them has been sweeping, but the markets may only turn if there is sign of major US involvement.
“Regarding the current issue of airstrikes in Syria, the thing people are concerned about is the credibility of the U.S. President. Yesterday the U.S. was saying Assad was a necessary evil, but today he is the devil because of the suspicion that he launched a gas attack on his own people. It’s time for a bit of political consistency and stability, which we are not seeing from Donald Trump at the moment. We can see the impact on the stock market,” says Oddo Seydler bank’s Oliver Roth.
With this president the markets may have to learn to expect the unexpected, and volatility is a trader’s nightmare.
European stocks fell, the airstrikes setting them up for a small weekly loss, while the rouble lost over one percent and could record its biggest one-day fall in a month if the slide continues.
In general terms right now, the riskier the asset, the more chance there is of it falling.