Monday 09:35 BST
What you need to know
- European stocks steady after robust showing across much of Asia
- Oil off highs as investors react to US-led strikes on Syria
- Haven assets slip amid measured reaction from investors
- Sustained selling of government debt sends 2-year Treasury yield to 10-year high
- Hong Kong, China stocks fall on central bank moves, trade tension
“The escalation in geopolitical tension in Syria has limited impact on overall market sentiment,” says Tai Hui, chief market strategist for Asia Pacific, JPMorgan Asset Management.
“This makes sense considering the marginal impact on global economic activities.”
European bourses are holding their ground after a steady showing in much of Asia and investors are not moving into haven assets, in a measured market response to the weekend’s US-led military strikes against Syria.
Oil prices are also coming off last week’s three-year highs as investors hope that the conflict will not escalate.
The lack of a flight to safety is most apparent on short-dated US government debt, where sustained selling took the yield on the 2-year Treasury to its highest since September 2008, at 2.3867 per cent.
The rouble is weaker by a further 1.5 per cent to Rbs62.9930 per dollar, leaving it around last week’s intraday nadir of Rbs65 — a level it previously traded at in late 2016.
Moscow’s main stock indices fell by more than 1 per cent in initial trade.
The Europe-wide Stoxx 600 is flat, as is London’s FTSE 100 in London, while Frankfurt’s Xetra Dax 30 is up 0.3 per cent.
Futures trading is pointing to gains of 0.4 per cent for the S&P 500 at the New York open.
Tokyo’s Topix added 0.3 per cent despite declines for energy and resources stocks in response to lower oil prices. The S&P/ASX 200 in Sydney was up 0.3 per cent, with a fall for industrials outweighed by gains across other market segments
Hong Kong and China are lower, with the mood tracking trade tension with the US and further regulatory action.
Weakness in the Hong Kong dollar and expectation of continued central bank action to underpin the currency hit Hong Kong stocks.
The Hong Kong Monetary Authority intervened last week to prop up the Hong Kong dollar after it fell to HK$7.85, the bottom of its trading band and the lowest level since 2005. Analysts said further intervention could put pressure on Hong Kong’s property market.
Rusal also weighed on the Hang Seng, with shares in the Russian aluminium producer tumbling as much as 21 per cent after the US promised new sanctions against Moscow for supporting the Syrian government.
Mainland China’s CSI 300 index of major companies listed in Shanghai and Shenzhen is down 1.5 per cent.
Forex and fixed income
The dollar index is down 0.1 per cent, with the euro 0.1 per cent higher at $1.2341. The pound is up 0.1 per cent at $1.4252.
The yield on US-10 year Treasuries is also higher — up 2.3 basis points at 2.864 per cent — as investors drop government debt, which is up 1 basis point at 2.864 per cent.
Brent crude, the international oil benchmark, is down 1 per cent at $71.81 a barrel. West Texas Intermediate, the US marker, retreated 1 per cent to $66.75 a barrel.
The declines came after oil’s biggest weekly advance in more than eight months, as the geopolitical mood darkened, taking them to their highest level since late 2014.
For market updates and comment follow us on Twitter @FTMarkets