Markets Lower, Gold Rises as Iraq Situation Worsens
June 16, 2014 7:17 am
European stock markets dropped Monday, starting the week on the soft-side amid continued fears over the tensions in Iraq, propping up global oil prices on disruption fears. The Stoxx Europe 600 Index retreated below the flat line, at around 346.80.
Asian markets declined overnight, while on Friday in the US the S&P 500 rose 0.3% to close at 1,936 but finished well off session highs due to geopolitical risk. Over the weekend, Iraqi army troops killed more than 279 rebels as the prospect of civil war intensifies. In response, the US moved an aircraft carrier into the Gulf, which has fuelled worries over a possible US military intervention, which will have detrimental implications not only for the oil market but also for the Middle East’s already strained relationship with the US. Oil prices are holding around six-month highs, with Brent crude at $113.10 a barrel. Conversely, the Iraq violence has driven up the price of gold $4.70 on Monday, a fifth straight gain to around $1282 per ounce as traders seek safer assets.
In Asia overnight, markets were mostly trading lower with Tokyo’s Nikkei 225 Average down 0.6%, while Sydney’s S&P/ASX 200 and Hong Kong’s Hang Seng both traded just below the flat line. Japan’s Nikkei 225 Average is back below 15,000, as a push towards safe-haven assets helped to boost the yen and weigh on equities.
Looking ahead, much of the market focus will be on a trio of important economic data releases from the US; the Empire State manufacturing report, industrial production and NAHB housing report. All three will offer insight into different facets of the US economy, with much of the attention on the housing market which stalled during the winter months in the US. Over in Europe, there’s little on the macro menu today, however, market participants will be focussed on UK CPI, PPI and retail sales data this week.
The main event this week is the Federal Reserve’s policy meeting, in which the central bank is set to continue tapering the bond buying programme, as well as retaining a dovish stance on monetary policy in the months ahead. However there is some expectation that the Fed may drop further hints as to its timetable for monetary tightening, as BoE Governor Mark Carney did last week.
European stock markets dropped Monday, starting the week on the soft-side amid continued fears over the tensions in Iraq, propping up global oil prices on disruption fears. The Stoxx Europe 600 Index retreated below the flat line, at around 346.80.
Asian markets declined overnight, while on Friday in the US the S&P 500 rose 0.3% to close at 1,936 but finished well off session highs due to geopolitical risk. Over the weekend, Iraqi army troops killed more than 279 rebels as the prospect of civil war intensifies. In response, the US moved an aircraft carrier into the Gulf, which has fuelled worries over a possible US military intervention, which will have detrimental implications not only for the oil market but also for the Middle East’s already strained relationship with the US. Oil prices are holding around six-month highs, with Brent crude at $113.10 a barrel. Conversely, the Iraq violence has driven up the price of gold $4.70 on Monday, a fifth straight gain to around $1282 per ounce as traders seek safer assets.
In Asia overnight, markets were mostly trading lower with Tokyo’s Nikkei 225 Average down 0.6%, while Sydney’s S&P/ASX 200 and Hong Kong’s Hang Seng both traded just below the flat line. Japan’s Nikkei 225 Average is back below 15,000, as a push towards safe-haven assets helped to boost the yen and weigh on equities.
Looking ahead, much of the market focus will be on a trio of important economic data releases from the US; the Empire State manufacturing report, industrial production and NAHB housing report. All three will offer insight into different facets of the US economy, with much of the attention on the housing market which stalled during the winter months in the US. Over in Europe, there’s little on the macro menu today, however, market participants will be focussed on UK CPI, PPI and retail sales data this week.
The main event this week is the Federal Reserve’s policy meeting, in which the central bank is set to continue tapering the bond buying programme, as well as retaining a dovish stance on monetary policy in the months ahead. However there is some expectation that the Fed may drop further hints as to its timetable for monetary tightening, as BoE Governor Mark Carney did last week.
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