Trading 101
Over the weekend we looked at the power of doing nothing in our trading and how unexpected events can provide unexpected opportunities. Sadly, the drone attack on one of Iran's top generals provides a good basic learning point for investors
In this instance when the US President Trump directed the killing of top Iranian general Qasem Soleimani in a drone attack at Baghdad airpot during last week escalation of the situation seems inevitable now. I can't see a situation where there is not a response. The only question is, 'to what degree is that response and what will the knock on impact be?'
Look our for a reaction from the following markets on any further escalation or retaliation of the present situation
Yen
The Japanese Yen is a safe haven currency which investors rotate into during times of uncertainty. The Yen is most probably the largest risk sentiment mover and is the go to currency of choice for risk on and risk off moves.
Risk off= YEN strength
Gold
Adam has continually reminded us of the strong bids in gold during January over the last few years and any risk off flows only add extra fuel to that fire. Expect bids at market for gold on any further military reaction from either the US or Iran
Oil
Oil is bid on supply issues with a middle eastern crisis liable to spill over to Iraq and Saudi Arabia. so again look for bids here.
In terms of risk off moves, these are some of the key markets to focus on should the situation deteriorate further. Also, look for reverse moves should the situation surprisingly de-escalate. A simple playbook.
