This information has been prepared by IG, a trading name of IG Markets Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients.
While still under the shadows of the Syrian strike, the market has a new story to follow and that is the deployment of a nuclear-powered aircraft carrier to waters surrounding the Korean Peninsula. The markedly unusual move had been explained as a reaction towards North Korea’s provocations and have fuelled concerns that further tensions may emerge. Certainly with the hardening of the stance by the new US leader, the concern could very much be justified.
For the markets, the reaction had been apparent. The most notable change was a pick up in the fear gauge, the CBOE volatility index or VIX, spelling a 9.2% spike. The index rose to the highest level since early December 2016, ending Monday’s session at 14.05.
Wall Street meanwhile saw near-neutral changes in the day despite the choppiness. While technical indicators suggest that prices continue to look for a breakout from the current symmetrical triangle setup, the underlying driver may be the anticipation of corporate earnings ahead, keeping changes almost to a standstill.