Pre election jitters

Asian markets rose Thursday following broad losses the previous two days but analysts warned caution was prevailing owing to geopolitical worries and fading hopes for Donald Trump’s massive stimulus drive.

Energy firms were among the main laggards, tracking losses in their US counterparts, after a surprise jump in US petroleum inventories sent oil prices skidding almost four percent Wednesday.

Tokyo ended the morning 0.3 percent higher, while Hong Kong added 0.5 percent, Shanghai gained 0.1 percent, Sydney put on 0.3 percent, Seoul edged up 0.4 percent and Singapore 0.2 percent.

But the gains come after markets have been rattled in recent weeks by a series of events that upended the optimism that saw in the year.

Trump’s failure to push through key healthcare reform last month dealt a huge blow to his chances of passing the tax-cutting, big-spending plan that had helped fan a global rally.

That was followed by a US missile strike on Syria — which hit US-Russian relations — and the ongoing sabre-rattling by North Korea that has fuelled worries about nuclear conflict.

At the same time France and Germany are preparing for elections that could have big implications for the eurozone, and Britain’s shock decision to call a general election next month.

– Energy firms lag –

And an uninspiring Federal Reserve report Wednesday on the US economy also failed to provide any lift.

“Geopolitical angst, a faltering US economy and the UK snap election are consuming investors mindsets,” said Stephen Innes, senior trader at OANDA.

“With so many uncertainties offering few incentives for investors to re-engage risk exposure, clearly there is little market bravado as dealers appear to be disposed to participate after the fact, rather than play the post-election knee-jerk.”

AFP

This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

Stephen Innes

Stephen Innes

Senior Currency Trader and Analyst at OANDA
Stephen has over 25 years of experience in the financial markets and specializes in Asian currencies at OANDA. After having started his trading career with NatWest Bank, he is currently based in Singapore as a Senior Currency Trader and Analyst with OANDA, focusing on the movement of the Aussie Dollar and ASEAN Currencies. Stephen has an extensive trading experience in Interest Rate Futures, Money Markets and Precious Metals. Prior to joining OANDA, he worked with organizations like Cambridge Mercantile, Nat West, Garvin Guy Butler, Sumitomo Mitsui Banking Corporation. Stephen was born in Glasgow, Scotland, and holds a Degree in Economics from the University of Western Ontario.
Stephen Innes
Stephen Innes

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