IG MARKETS SPONSORED POST
Tensions in the Middle East was the major macroeconomic story yesterday. Nerves were rattled on Friday after the US announced that it had killed top Iranian General Qasem Soleimani, and sparked concerns of an outright conflict in the Middle East. Asian and European stock markets generally underperformed yesterday as a result of the news, which occurred on Friday after the region’s markets had closed. Its impacts appear to be exhausted now, however, with Wall Street stock indices trading largely flat overnight.
Oil prices have rallied nearly 7 per cent since Friday, as traders price into the market the possibility of supply and production disruptions in the Middle East.
Gold has proven to be the asset of preference for traders, and that saw the yellow metal briefly touch a 7 year high yesterday. The moved was helped along by a drop in sovereign bond yields, courtesy too of a heightened desire for safety.
Economic data was dominated by a spate of global services PMI figures in the past 24 hours. The numbers, particularly those out of Europe and the US, printed generally better than expected, and eased some of the fears about the general state of global growth, elicited by last week’s series of underwhelming manufacturing PMI figures. The data docket remains relatively light still for the rest of the week, with the big focus on US Non-Farm Payrolls data on Friday.