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Here what we're watching with trading underway in London. The mood is nervy for equities, bonds, and currencies. Trading is being influenced by geopolitics, starting with Russia's dispute with the West over Syria and heightened tensions on the Korean peninsula. Investors in European assets are also awaiting the upcoming first round of the French election.
Against that backdrop, the post November reflation trade remains under sustained pressure. Worries over US earnings, amid the usual spinning of activity as we approach Easter not helping matters. As equities struggle for traction, haven assets are not surprisingly attracting buyers.
The yen has appreciated beyond 110 to the dollar, while gold holds near a five month high around $1,275 an ounce. Completing the risk off mantra, 10 year treasury yields loiter around 2.3%, while US equity volatility has hit its highest levels since November. Now, one morsel of comfort, at least for oil traders and industry, crude oil prices are firmer, reflecting expectations that OPEC will extend its production cut agreement as US inventories finally show signs of dropping.