Stock markets rose, bonds sold off a little and the US dollar, Japanese Yen and gold lost their safe haven bid overnight.
While the sadness and anger hasn’t dissipated one of the primary drivers behind the markets rally is the recognition that however heinous the shooting down of MH 17 is it looks like as huge mistake by the rebels in eastern Ukraine as Business Insider reported yesterday.
That matters because while the pressure on Russia remains intense, with condemnation in the UN Security Council and the threat of further sanctions by US President Obama, traders are betting the immediate geo-political risk from this incident appears to have receded.
So stocks leapt higher with the Dow closing above 17,000 with a gain of 123 points or 0.7% at 17,100. The Nasdaq rose 1.57% to 4,432 and the S&P 500 was up 1.02% or 20 points higher at 1978.
In Europe stocks were more mixed with the FTSE and CAC higher but the DAX lower.
On the ASX futures market the SPI 200 September contract was up 22 points to 5,506 bid after the US moves.
In a sign of an enduring economic disconnect between bonds and stocks, higher rates were seen with US 10’s up 3 points to 2.48% but still below 2.50%.
On FX markets the Ausie rallied with stocks and is back at 0.9392. The Euro rallied back to 1.3526 and USDJPY closed at 101.32.
We’ll have a full wrap in our 20-Second Guide To What Aussie Traders Will Be Talking About on Monday with all the market moving developments over the weekend.