Markets Overview

HIGHLIGHTS AHEAD

    Geo-political risks took grip on the financial markets on Thursday (17 Jul) with shooting down of the Malaysian Airlines passenger jet near the Ukraine-Russia border and Israel continuing its offensive in Gaza aimed at stopping the barrage of missiles fired by Hamas and other Palestinian militants. The truth is that these geo-political developments (especially the Ukraine-pro-Russia rebels conflict) has been on-going for a while but this latest flare-up finally made the markets sit up and take serious notice of the potential gravity of the situations, sending US and European stocks tumbling (with the airline stock most badly hit) while spurring a flight to safe haven assets, namely US treasuries, gold and Japanese yen. Global oil prices also spiked up on Thursday on renewed concerns about threats to global supplies.

    The US data is very light for Friday (18 Jul) with the focus instead on geo-political developments following the Malaysian Airlines passenger jet crash near the Ukraine-Russia border. Key US data is on the preliminary print for the July University of Michigan consumer confidence survey and June leading index. So instead of the data, the market focus will still be on the heavy calendar of US corporate earnings reports and we have many industrial heavyweights reporting today including Honeywell, IBM, General Electric, BNY Mellon and American Airlines. The key economic data from developed economies include Bank of Japan’s latest minutes, Japan June department sales, Canadian June CPI and the euro-zone May current account balance.