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Political events having little effect on markets

The tension throughout the world from Nice and Istanbul to Yerevan and Almaty is, unexpectedly, having less of an effect on world markets than one would have thought. The majority of financial markets on Monday were lacking in volatility, with oil dropping from $47.9 to $46.5 per barrel of Brent despite the geopolitical risks. By the end of a rather quiet Monday, the prices managed to restore to $47.0 and on Tuesday morning Brent was trading in a $46.7-$47.0 per barrel range. This evening will see the API’s oil report out.

Yesterday’s varied closing of world stock markets was supported this morning by Asian markets. The Nikkei 225 rose by 0.9%. The ASX Australia was down 0.2%. The Shanghai Composite decreased 0.7%, and the Hang Seng was down by 0.6%. Futures for the S&P500 were trading at 2157; 0.1% below the closing level of the previous trading day.

An increase of up to 100 freight trains from China to Europe is expected in 2016. By 2020 this indicator is expected to have risen to 2,000 trains: 80,000 containers with an estimated worth of 78.3 billion yuan. The reason for such increases is plans for high trading activity between China and the EU. The volume of bilateral trade for the first five months of this year amounts to 1.39 trillion yuan and, as such, the EU remains firmly planted as China’s major trading partner.

The USD was trading slightly down against the yuan at 6.6987 (-0.0058or -0.09%).

Whilst waiting for the ECB to convene, the euro/dollar isn’t very active. It strengthened slightly from 1.1040 to 1.1075 on Monday and on Tuesday morning was trading in a narrow range of 1.1065-1.1080. Today is quite busy from the perspective of economic news, with stats from the UK, Germany (+ EU data) and the US all to play their part. In-the-spotlight Turkey will see its central bank convene to make an interest rate decision after the failed coup at the weekend.


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