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Asian Shares Up, Oil Down As Syria Fallout Seen Limited

Kitco News

Wayne Cole

SYDNEY (Reuters) - Share markets started firmer in Asia on Monday amid relief U.S.-led strikes on Syria looked like being a one-off event that avoided a direct confrontation with Russia, weighing on oil prices and safe-haven Treasuries.

EMini futures for the S&P 500 ESc1 sprang 0.6 percent higher in early trade, while Japan's Nikkei .N225 added 0.3 percent.

MSCI’s broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS edged up 0.1 percent.

The United States, France and Britain launched 105 missiles targeting what the Pentagon said were three chemical weapons facilities in Syria in retaliation for a suspected poison gas attack in Douma on April 7.

Russian President Vladimir Putin warned on Sunday that further Western attacks on Syria would bring chaos to world affairs, as Washington prepared to increase pressure on Russia with new economic sanctions.

But with President Donald Trump declaring mission accomplished, investors wagered the worst had been avoided.

“Trump was able to enforce his chemical weapons red line without crossing the threshold for Russian retaliation,” said analysts at JPMorgan in a note.

“Stocks were concerned about a prolonged and expanded U.S. campaign towards Assad and that doesn’t look probable.”

Safe-haven assets eased in response, with yields on U.S. 10-year Treasury debt US10YT=RR up two basis points at 2.84 percent.

The dollar inched up 0.2 percent on the yen to 107.53 yen JPY=, and away from last week's low around 106.62.

The euro was flat at $1.2330 EUR=, while the dollar index was a fraction firmer at 89.803 .DXY.

In commodity markets, gold dipped 0.1 percent to $1,343.70 an ounce XAU=, and remained well short of last week’s peak at $1,365.23.

Oil prices slipped with Brent crude futures LCOc1 off 31 cents at $72.27 a barrel, while U.S. crude CLc1 fell 26 cents to $67.13 a barrel.

Looking ahead, the U.S. earnings season kicks into high gear this week with Thomson Reuters data predicting profits at S&P 500 companies increased by 18.6 percent in the first quarter from a year ago, their biggest rise in seven years.

Yet with expectations so high, bank shares ran into profit-taking on Friday after a batch of mixed results.

In Asia, China reports its gross domestic product for the first quarter on Tuesday with market forecasts clustered around growth of 6.7 percent to 6.8 percent.

The U.S. reports retail sales later Monday and there are around 15 Federal Reserve speakers in the diary for the week.

Also this week, the IMF will hold its annual Spring meetings of central bankers and finance ministers in Washington.

Editing by Shri Navaratnam

Disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.

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