Markets: Investors focused on the preparations to strike Syria – BBH

The US dollar has steadied at lower levels, while equities eased as investors remain focused on the preparations to strike Syria and the still-tense rhetoric on trade, according to analysts at BBH.  

Key Quotes

“Reports indicate that the US and France have moved warships into the area and the UK has moved submarines within striking distance as well.”

“One thing that complicates matters is Russia's threats to retaliate in defense of Syria.  This obviously risks a larger confrontation with Russia.  That there is a civil war in Yemen that has killed tens of thousands of civilians without much outcry in the many of the same countries who are morally outraged at the deaths in Syria suggests a more complicated narrative.  The UN High Commissioner for Human Rights estimates that Saudi-led coalition air attacks has caused almost two-thirds of reported civilian deaths, while the Houthis have been accused of causing mass civilian casualties due to their attack on Yemen's third-largest city.”

“This is important to understand the general cautiousness of investors throughout the capital markets.  The possibility of a large-scale military confrontation, with the civil war in Yemen being another front, is a serious risk.  It is not as if there is a large broad decline in equities.  It is more of a drift lower as potential buyers move to the sidelines.  The MSCI Asia Pacific Index snapped a three-day advance with nearly a 0.5% decline today.  India, Malaysia, and Thailand are bucking the trend and posting modest gains.”