US Markets will be closed today, but European markets have started off fall on a great foot.All the big indices are up.
Italy, Germany, and France, are all up in the neighborhood of 1.5%.
The decision to hold off on Syria by President Obama is being taken as good news by markets.
Add in some solid data (improving manufacturing data in both Europe and China) and you have an excuse for gains.
SocGen strategist Kit Juckes summarizes the situation thusly:
Better data, a new month and a delay to military action are all decent enough reasons for the yen to fall, peripheral European bonds to out-perform, and high-beta currencies to rally, I am not going to get carried away. Military action is only delayed, for starters. A more meaningful EM/risk rally, is likely only once the Fed has announced ‘tapering' and the Treasury has conducted an auction or two thereafter. I doubt the new, post-taper clearing price for Treasuries is dramatically different from current levels, but we need to cross that hurdle before market confidence can be rebuilt. After that, we shift our attention to the timing and extent of US rate hikes, and since they remain distant, the first move could be to go yield-hunting. So, I'm looking for a ‘proper' risk rally when September ends. For now though, short JPY, long European bonds vs. the US (long Spain vs US for maximum short-term movement) seem like sensible trades.
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Reported by Business Insider 24 minutes ago.