The pace of war has been so close? This moment: the global market is screaming!

Global Forex, April 12th - Since April, the global market has undoubtedly experienced a period of high geopolitical risk. First, the United States bombarded Syria, and then the United States targeted guns at North Korea. And overnight, the panic of the market seems to have set off a new round of concentrated catharsis! Investors rushed out of the stock market and poured into gold, yen, and US Treasury bonds.

Do you want to know how scary the current global market is? Let us first look at the following charts!

1"going to war" becomes Google search

Have you recently felt that you are going to start playing in the Third World War? In fact, look at the changes in Google's hot search, you can know why the global financial market is so panic. Zerohedge, a well-known financial blog site, pointed out on Tuesday that the picture below may be the most horrible chart in the world - the current "going to war" search trend is rising at an unprecedented rate, reaching the hottest for more than a decade. degree. At this moment, the war seems to be so close to us!

2 panic indicators hit a new high since the US election

On Tuesday, the panic index VIX rose to 15.45, the highest since the US presidential election. The progress of the French elections and the geographical risks of Syria and North Korea have caused many investors to feel anxious. And one day ago, we just mentioned that Credit Suisse’s Fear Barometer has risen for six consecutive trading days, setting the longest continuous upswing since August last year. Used to measure the short cost of a three-month call option for the S&P 500 index.

3 euros uncertainty rises to record highs

The euro is still at the forefront of the market! With the French election coming soon, investors are worried about increasing emotions, and the market is complacent to give way to extreme cautiousness. This has caused the euro-dollar volatility gap to rise sharply from one month to two months, even higher than the level of the Lehman crisis. In addition, the one-month implied volatility of the euro/dollar hit 12.643%, hitting a new high since the Brexit referendum, and may be affected by the French election.

4 International gold price once again broke through the 200-day moving average

As the saying goes: "The sound of the cannon is loud, and the gold is two thousand." When extreme risk aversion is once again lingering on the market, the price of gold has undoubtedly become a safe haven in the eyes of countless people! International gold prices rose sharply on Tuesday, and the strength climbed above the 200-day moving average, the second time since last Friday. UBS said in a report released on Tuesday that gold continues to be supported by geopolitical issues. Analysts pointed out that the Commodity Futures Trading Commission data shows that net long or bullish positions have risen for three consecutive weeks.

There is no doubt that the global financial market has now been shrouded in strong risk aversion. The current market is also focused on three points: the Middle East and the Korean Peninsula, which may be in danger of war, and the upcoming French election. Before these "storm eyes" have seen more signs of turning to danger, no one dares to have the slightest wish!

[North Korea warns that if the provocation will launch a nuclear strike, Trump's "Invincible Fleet" approaches]

North Korea’s state media warned on Tuesday that if the United States reveals any aggressive intentions, it will launch a nuclear strike; at the same time, a US Navy strike group is heading for the Western Pacific Ocean – President Trump calls it the “Invincible Fleet”.

Trump has called on China to take more action to restrain itself as a poor neighbor. He said on Twitter that North Korea is "seeking trouble" and that the United States must "solve this problem" with or without the help of the Chinese government. Trump said on Twitter, "If they (China) solve the North Korean problem, then the trade agreement with the United States will be far more beneficial to them. If China decides to help, it would be great. If not? , we will solve the problem ourselves. "

At present, the tension on the Korean peninsula has greatly escalated. The outside world is worried that North Korea may soon conduct its sixth nuclear test. The US government revealed on the weekend that the Carl Vinson aircraft carrier strike group is being sent to the Korean peninsula to show its military strength. . Trump told the Fox Business Network, "We have sent a very powerful invincible fleet, and we have a very powerful submarine that is more powerful than this aircraft carrier. It can be said."

North Korea has said earlier that it is ready to respond to any violations of the United States. The North Korean official media labor news said, "Our revolutionary army is closely monitoring the hostile forces every move, has placed the US aggression base under our nuclear weapons scope, not only in South Korea and the Pacific, but also in the United States. ”

Despite these military rhetoric, US officials have previously stressed that strengthening sanctions is the most likely route for the United States to push North Korea to abandon nuclear weapons. At the same time, Washington also said that all options, including military options, are possible. The United States attacked Syria last week and is also beating North Korea. The US strike group sent to the Korean Peninsula includes the flagship Carl Wensen nuclear-powered aircraft carrier, two destroyers and a cruiser. Such strike groups are usually equipped with submarines, but the Pentagon generally does not disclose the matter.

White House spokesman Sean Spicer said that Trump had "clearly informed" North Korea that he would not tolerate certain actions and threatened the North Korean nuclear attack. "I don't think there is any evidence that North Korea has this ability at this stage," he said. “It’s not a real threat to threaten things that you have not been able to do.”

North Korea has conducted five nuclear tests, two of which were last year. The country is currently working to develop a nuclear missile that can reach the United States, which may be the most pressing security threat Trump faces. South Korean acting president Huang Jiaoan warned that North Korea may make "more provocations", including possible nuclear tests, because North Korea convened the Supreme People's Conference and is about to usher in an important national commemoration day.

The North Korean Central News Agency (KCNA) said that North Korea held the Supreme People's Conference on Tuesday, and Kim Jong-un attended the meeting, which successfully reported on national budget execution and personnel appointments. Saturday will be the 105th anniversary of the birth of Kim Jong-sang, the "father of the nation" and the grandfather of Kim Jong-un. Pyongyang will hold a military parade to commemorate. North Korea often conducts nuclear tests or missile tests on important anniversaries.

[Putin exposes the Syrian chemical weapons conspiracy, and the Middle East has once again become a US-Russian game! 】

The Korean peninsula has once again become arrogant, and the follow-up influence of the US air strikes against Syria last week is still continuing to ferment, and the game between the United States and Russia in the Middle East has significantly improved. According to "Russia Today" (RT) reported on Tuesday, Russian President Vladimir Putin said at a press conference in Moscow that Russia has received reliable information before the chemical weapons attack in the southern part of Idlib, Syria. The incident was planned by the common enemy of Russia and Syria and was intended to blame the Assad government. Putin also said that the other side is planning more similar attacks, the target is likely to be the suburb of Damascus, the capital of Syria.

Putin said: "We have received many news that the common enemy of Russia and Syria is currently preparing for more chemical weapons attacks in other parts of Syria, such as the capital of Damascus, and will blame the Assad government for this. By air raid. I can't use other words to describe this plan except for 'provocation'."

A few days ago, US Presidential National Security Assistant McMaster criticized Russia for supporting Syria and the Assad regime "killing civilians on a large scale." In this regard, Putin said that he could not tolerate Western criticism of Russia's role in the Syrian issue. He said: "The United States launched an air strike against Syria, which reminds me of the US attack on Iraq on the grounds that it possesses weapons of mass destruction in Iraq. We cannot tolerate Western criticism of Russia’s role in the Syrian issue and hope that international authorities will conduct a more in-depth investigation into the Syrian gas attack."

In fact, the United States and Russia are deadlocked on the Syrian issue and relations between the two sides continue to deteriorate. The Russian Foreign Ministry said that before US Secretary of State Tillerson visited Russia, US-Russia relations reached the most rigid state since the Cold War. The Associated Press quoted a senior US official on the 10th as saying that the United States accused Russia of having been attacked by chemical weapons beforehand and is more likely to send warplanes to bomb local hospitals in an attempt to destroy the evidence. The anonymous official said: "The United States has determined that Russia has already received relevant information and sent a drone to patrol the hospital for the attacker after the incident. After the drone left for a few hours, a Russian fighter was present. Bombing the hospital, trying to cover up the use of chemical weapons."

At the same time, Russia also sent a speech attack to the United States. The Russian Foreign Ministry issued a statement saying that the invasion of Syria by the United States and its allied forces did not require the consent of the Syrian authorities. A spokesman for the Russian Foreign Ministry believes that if the United States was previously based on the anti-terrorist mission, then it is now a flagrant aggression against Syria’s sovereignty.

Earlier, the deterioration of relations between the United States and Russia has already begun to take shape. On April 10, Russia unilaterally announced the suspension of the US-Russian security memorandum on Syrian airspace. Russian Defense Ministry spokesman Konashenko said that the US military attache to the Russian Embassy has received a notice from Russia that Russia will suspend the memorandum between the United States and Russia on safe flights in Syrian airspace.

After receiving news of Russia’s unilateral suspension of the security memorandum, the US Defense Department spokesperson expressed regret. He hoped that Russia can continue to maintain contact with the US to ensure the safety of flights between the two sides over Syria. He said: "We hope to continue negotiations and consultations with Russia on the safety of flights above Syria. This is very important to the interests of both of us, and it has a lot to do with the influence of various parties in Syria. We hope that Russia can handle this carefully. Don't be tempted to use things."

[Is Trump really dragging the United States into war? Financial markets need to be careful about the catastrophe! 】

What kind of events can be counted as tragedies for the United States? Although the United States has been involved in almost all modern warfare, the people of this country are still considered to be the most peaceful culture in the world. The reason why the American people voted for President Bush is because he promised to adhere to the foreign policy of non-interventionism. People voted for Obama because he promised to let the US troops go home from Iraq and Afghanistan. Now, the American people voted for Trump again because he promised to end the national policy pursued by his predecessor.

The American people are actually experiencing various tragedies. For the past 20 years, they have voted for peace, but they have placed themselves in war.

One real thing that needs to be told to everyone now is that the US political system never cares about the political position of the president's representative or the real needs of the voters. This system has never been responsible for anything, so there is nothing to stop it. On the other hand, the US political system has always operated in its own way. Therefore, if the US government wants to provoke a war, then people can bet that the war is approaching.

ZeroHedge columnist Tyler Durden wrote that when people start thinking about all of these issues, one thing is absolutely clear. If Trump drags the United States into a large-scale war, whether or not the war will break out on a global scale, the dollar will surely collapse. And the dollar may not even survive in the current currency. When this happens, people will flee to safe-haven assets. You can be sure that gold will come back. Even if we in this group of people can't see the scene of gold return in their lifetime, all this will happen.

Over the years, Russia and China have established a financial system that can replace the dollar's dominant position. Financial groups dominated by BRICS countries are hoarding gold and establishing trade agreements that do not involve the US dollar. When the war breaks out, there will be another financial system waiting to replace the dollar-dominated financial system. Although the history of the dollar as a global reserve currency has been around for decades, the war will inspire China, Russia, and other allies to completely abandon the current global economic model.

On Tuesday, Nomura Securities also summarized the performance of the US capital market during the Gulf War and the Iraq War, with a view to making a reference to the ongoing Syrian armed conflict and the deteriorating US-DPRK situation.

Nomura found that the capital flow represented by the stock market is often risk-on when the war broke out, not generally considered risk-off; while the interest rate market and the dollar trend depend on the Fed's policy. After the US launched an air strike against Syria, the yield on US bonds fell. When the "Carl Vinson" aircraft carrier battle group approached the North Korean waters, the price of gold also performed flat. Therefore, Nomura’s report to clients indicated that investors are not recommended to buy US debts in large numbers unless the Fed weakens the previous hawkish stance in order to solve the new geopolitical risks.

In the previous US-involved war (the following picture is an example of the Gulf War and the Iraq War), the market often chooses a hedge-risk when the event is triggered, but when the US or multiple countries take military action, the market will become risk-on. . However, these trends show that only the stock market, interest rates and the dollar trend more related to the central bank's monetary policy.

Recalling the previous two wars occurred in the Fed's monetary easing cycle, and the poor economic environment may prompt the US government to seek military stimulus. This time, the Syrian war was not only within the expectations of the market, but also the economic environment was not as clear and clear as the Gulf War and the Iraq War.

Currently, the United States is in the process of raising interest rates, and macroeconomic data is constantly improving. Considering that during the previous two wars, the interest rate and exchange rate market movements were closely related to the Fed's policies and were not affected by investor concerns about war risks. Nomura Securities believes that the trend of these markets will depend more on the economy under geopolitical risks. elasticity.

Editor: Xiaoxiang

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