Market update: Missiles cruise carefully over Syria, S&P praises Poland, China tests smart roads

16 Apr

by Mihály Tatár


Good Morning!


  • Markets noted with some relief that the US-UK-France missiles strikes on Syria carefully avoided Russian military assets and even Syrian political targets, hinting that the punishment won’t escalate into a world power showdown (SPX futures +0.43%, Nasdaq futures +0.40%, Nikkei +0.28%, WTI 66.90, Brent 72 USD). It’s worth mentioning that 1. Russian air defenses over Syria were ordered not to engage, which is a sign that there was some coordination between the two militiaries 2. It was reported that mass Russian reinforcements were arriving in Syria (tanks, trucks, armoured vehicles, patrol boats), and Iran allowed Russia to deploy heavy bombers on its airbases, meaning, the retaliation will come in the form of even more intensive Iranian-Russian war support for Assad 3.the US announced further sanctions against Russia, to be a detailed today 4. many note that Merkel just isolated Germany’s political position further when she declined to take part of the air strikes, while the supposedly Trump-averse UK and France became ’buddy-buddies’ with Trump 5. Trump’s approval rating jumped to the highest level since he became President (sorry New York Times, porn stars have the importance of, well, porn stars). In the meantime, Qatar issued its own bonds as well, which went pretty normal despite the Syria tensions and the Saudi threats (12 billion USD, 5Y at 135, 10Y at 170, 30Y at 205 basis points over US Treasuries), and S&P raised the outlook of Poland’s credit rating to positive on robust economic expansion. (The latter is somewhat entertaining, as S&P only put Poland’s rating to Mexico’s level to help the EU put Warsaw under pressure. It definitely didn’t work – growth never slowed down and is expected to reach 4.5% this year – prompting Warsaw to talk back and demand a rating upgrade from the rating agency.  The Zloty strengthened to 4.165 against the Euro (+2%), but regional currencies generally strengthened as well (EURHUF 310.70, EURCZK 25.28).


  • With the Iranian Rial plunging by one-third of its value in four months (60,000 Rial per Dollar, at the time of the Islamic Revolution, it traded at 70, by the way), the temperature in the Iranian Parliament exploded with top politicians turning on each other, and many observers are wondering if another currency collapse can be avoided if the 2015 nuclear deal is withdrawn by the US or new sanctions are announced.


  • While the mainstream media focuses on the overhyped self-driving car theme in the West, China is already working on ’smart roads’: Solar panels, mapping sensors and electric-battery rechargers are built into pilot highways, which can then manage their traffic (potentially also navigating cars in the future) and power the highway lights and the nearby houses.


Have a nice week,



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