"If it's not one thing, it's another ....."

ref :- "Five Things You Need to Know to Start Your Day" , Bloomberg Markets Just time for a brief lunchtime shufti at what's going on, and it reveals of course that the focus of attention may have moved but the anxiety levels are if anything even higher. As we've been saying, when it comes to the US / China trade dispute, if it's another day then it must be another change in sentiment. The needle has been swinging between pessimism and optimism as developments unfurl and the markets have been struggling to keep up. The danger of short-term traders getting "whipsawed" in these conditions is very real, but today is obviously a "good" day as far as the trade stand-off is concerned. China's President / Emperor for Life Xi Jinping was surprisingly restrained and conciliatory in his latest speech, and President Trump even thanked him for his "kind words", would you believe ? Really, you couldn't make it up but for today at least, everything's a lot calmer on that front. Normally, that would be the cue for the return of a little "risk-on" impetus, though anyone who is convinced that this means that a negotiated solution to this issue is heavily odds-on all of a sudden has more faith than we do. This thing has a long way to go before we need to prepare ourselves for the rather unattractive prospect of Xi and Trump cooing over each other. The fact that any risk-on effect of the trade issue has not been evident in market moves is of course wholly down to Syria, which has unsurprisingly overwhelmed any warm and cosy feelings that the more constructive trade rhetoric might have engendered. During the long bull run , it has become unfashionable for investors to fear the worst but another audience might view what's going on in Syria as truly, deeply troubling. When a US President tweets that Russians on the ground should be warned that missiles are about to be sent in their general direction, and a Russian ambassador (to Lebanon) says that not only will they shoot the missiles out of the air but also target wherever they came from (US warships?), well ..... you don't have to be a professional prophet of doom to suggest that this is serious , and could get VERY BIG INDEED. Okay, now .... calm down. The markets, all things considered, have taken things relatively calmly but recent gains in equities are being reversed and there are some modest gains for the safe-havens of the Swissie and the Jap Yen. More marked are the advances in gold and government bonds, which may be a more accurate reflection of the size of the risk the world is facing, and of course oil. There aren't enough oil reserves or infrastructure in the particular area to notably affect prices on their own, but the dangers for the region as a whole if a shooting war starts are obvious. The Russian rouble, already under the cosh for the last week after the imposition of fresh sanctions by the US, has slumped further and has weakened by over 11% in a week. With the beneficial effects of a weaker currency to exports in mind, especially to oil revenues, that won't bother the Kremlin one bit but it will have inflationary implications that will not be so welcome. And talking of inflation, March US year-on-year Consumer Price Index has just been released at 2.4%, with core CPI ex-food and energy at 2.1%. These higher readings were in line with expectations, but although CPI is not the Fed's most preferred measure of inflation they do suggest that some inflationary pressure is percolating through. In different circumstances that might push bond prices lower / bond yields higher, but with Syria going on the attraction of government bonds as a safe-haven is having the opposite effect. The minutes of March's Fed Open Market Committee (FOMC) meeting will be released tonight, and while most investors would like to think they've now got a handle on the nature of the Fed under new Chairman Powell they'll be keen to see what the Fed's thoughts were about growing trade tensions, and their potential to affect both growth and policy. Of course, if Syria kicks off such considerations will be the last thing on people's minds,

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