Global capital markets stayed in a positive mood overnight, but investors remain on guard for any escalations in geopolitical tensions while trade tariffs remain bubbling under the surface. The easing of tensions in the middle east between Russia and the US saw oil prices continue to slide overnight. President Trump even walked back supposed planned sanction against Russia over Syria. While Syria in itself is not a significant player in the oil supply chain, but indeed a sense of relief has set in that the US-led airstrikes on Syria didn’t trigger a broader response from Russia which could potentially have sent the region into chaos and introduced many more players into the escalation matrix.
In the U.S., the S&P 500 Index gained to the highest in almost a month and erased its loss for the year on Monday as investors turned their focus to the earnings season after there was no immediate reprisal to the U.S.-led missile strike in Syria and trade concerns took a back seat. The Australian dollar shrugged off a bullish assessment of the economy from the central bank that was tempered by a continuing benign inflation outlook. The economy this year is expected to grow faster than its speed limit, with inflation just above the bottom of its target, the Reserve Bank of Australia said in minutes of its April policy meeting.
The Euro may witness significant volatility today due to the very important economic releases of the Eurozone ZEW Economic Sentiment Index, the ZEW Current Conditions and ZEW Economic Sentiment Index in Germany and the Balance of Trade in Italy. Higher than expected or increasing figures for the mentioned economic data will be supportive and positive for the Euro.