The "War" Effect | Forex Factory

  • The "War" Effect

    From zerohedge.com

    How do markets (US equities, Gold, Crude Oil, and the USD) react around US military conflicts...? Citi shows what happened before-and-after the Gulf War, Kosovo, Afghanistan, Iraq, and Libya... and why Syria is arguably more complex than these previous conflicts...The effect on the markets is interesting and important. S&P: trades better once conflict begins. This time should be no different. Gold: falls after start of action. Again should be no different. Crude: usually falls at or just prior to start of military action. USD: reverts back to dominant trend. USD weakened post-action in 1991, 2003, 2011 as it was in a ... (full story)

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numbnuts
Aug 29, 2013 5:20am
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I would have liked to see something like the CRB index included in this. Without it there is little on those charts that would cause somebody to stop and say "wow, what happened there?" Commodity prices tend to drive the other markets and tie the intermarket picture together in times of war.

Each war is unique, has a unique background and outcome and hits a unique market environment. Never before has something like this happened while US interest rates sit at historic lows AND Japanese dependence on foreign oil sits at all time highs.
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Exodus
Aug 29, 2013 3:05pm
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Quoting numbnuts
...Each war is unique, has a unique background and outcome and hits a unique market environment. Never before has something like this happened while US interest rates sit at historic lows AND Japanese dependence on foreign oil sits at all time highs.
Yes, only Libya war caused gold price to rise. Possibly because lots of high-up officials fleeing with gold in their pockets (Libyan currency not worth a lot). So here we have new situation perhaps? Russians and Chinese donate all their obsolete weaponry, US decides a different planned obsolescence strategy perhaps. However it looks like the Syrian store is becoming bare and causing Assad to use whatever he has left over, such as chemicals. I hope all the conflict remains in Syria.
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matheszabi
Aug 29, 2013 4:35am
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War need money, that's why gold ( reserves) sold to buy weapons.

US spend a lot of money for army. Some weapons going out from warranty got obsolescence and need to replaced by modern version. What to do with old weapons: use it: declare a war. Some money resources still needed the war: move troops, buy fuels and so on. For this reason it seems to have a higher demand the USD right now
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PA is King
Aug 29, 2013 3:45am
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Well, i can see A/U is still in the "sell the rallies" theme. Good news last night couldn't even help it get back to .9000. E/U is another sell the rallies pair too.
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Trader#E569
Aug 29, 2013 5:18am
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Long A/U, E/U - Short PA is King
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