Market Brief: Risk Assets Rally as Cooler Heads Prevail

See a summary of the top market themes and trends from today's US trading session!

View our guide on how to interpret the FX Dashboard.

  • Following peak “WW3” fears in overnight trade, cooler heads prevailed as news spread that there were no US causalities from the Iranian missile strikes and no immediate plans for further strikes. In a speech this morning, President Trump emphasized economic sanctions, rather than further military actions, in response to the attacks.
  • That said, late headlines of explosions in Baghdad’s “Green Zone” may keep traders on edge again heading into Asian session trade.
  • US data: The ADP Employment report (Dec) came in at 202k vs. 160k expected. Combined with upward revisions to previous reports, traders are more optimistic heading into Friday’s NFP report.
  • FX: The New Zealand dollar was the strongest major currency on the day, while the safe haven Japanese yen was the weakest as geopolitical fears receded.
  • Commodities: In a truly massive move, oil prices (WTI, -4%) traded as high as 65.60 before reversing to trade down to a low near $59 intraday, driven by receding fears of military action in the Middle East and a surprising buildup in inventories. The prices of gold (-1%) and bitcoin (-2%) followed similar, if less dramatic, intraday paths.

  • US indices closed higher as prices recovered from their overnight swoon. European indices also closed in the green, led by a 0.7% gain in Germany’s DAX.
  • Technology (XLK) was the strongest major sector on the day. Energy (XLE) was the weakest, and the only sector to fall, dragged down by falling oil prices.
  • Stocks on the move:
    • Boeing (BA) ticked -2% lower after one of its planes experienced a crash near Tehran, killing all 167 passengers and 9 crew members on board.
    • Pharmacy Walgreen’s Boost Alliance (WBA) slid -6% after missing analyst earnings and revenue estimates.
    • Retailer Macy’s (M) tacked on 2% after reporting solid holiday sales.

Disclaimer: The information on this web site is not targeted at the general public of any particular country. It is not intended for distribution to residents in any country where such distribution or use would contravene any local law or regulatory requirement. The information and opinions in this report are for general information use only and are not intended as an offer or solicitation with respect to the purchase or sale of any currency or CFD contract. All opinions and information contained in this report are subject to change without notice. This report has been prepared without regard to the specific investment objectives, financial situation and needs of any particular recipient. Any references to historical price movements or levels is informational based on our analysis and we do not represent or warranty that any such movements or levels are likely to reoccur in the future. While the information contained herein was obtained from sources believed to be reliable, author does not guarantee its accuracy or completeness, nor does author assume any liability for any direct, indirect or consequential loss that may result from the reliance by any person upon any such information or opinions.

Futures, Options on Futures, Foreign Exchange and other leveraged products involves significant risk of loss and is not suitable for all investors. Losses can exceed your deposits. Increasing leverage increases risk. Spot Gold and Silver contracts are not subject to regulation under the U.S. Commodity Exchange Act. Contracts for Difference (CFDs) are not available for US residents. Before deciding to trade forex and commodity futures, you should carefully consider your financial objectives, level of experience and risk appetite. Any opinions, news, research, analyses, prices or other information contained herein is intended as general information about the subject matter covered and is provided with the understanding that we do not provide any investment, legal, or tax advice. You should consult with appropriate counsel or other advisors on all investment, legal, or tax matters. References to or GAIN Capital refer to GAIN Capital Holdings Inc. and its subsidiaries. Please read Characteristics and Risks of Standardized Options.

Open an Account