We’ve had some decent news over the weekend that would suggest that we may well see a rebound in risk trades on the early market open later tonight. The Chinese PMI came in higher which could give a boost to the Aussie and Kiwi.
Syria has been weighing on currencies and stocks all week, while oil has been rising on the possible spillovers. With the US delaying any action, and seemingly unwilling to want to take the lead anyway, this is likely to give some relief to the selling in stocks and oil gains. This has been partly confirmed as Middle Eastern stock markets have posted decent gains today led by the Dubai stock exchange which rose 3% in Sunday trading. Abu Dhabi and Saudi Arabia rose 1.8% and 1.5% respectively after seeing big losses late last week. The positivity across the regions should play out in the major markets.
I wouldn’t get too tied into any reversals as the Syrian issue is far from over, but with the US closed on Monday the thin liquidity may add to the moves if they materialise.
