Rising global political tensions threaten financial markets

During the past few years, the world has gone through a difficult period of political events full of anxiety and tension that have taken over the whole world, especially with the escalation of tension between the United States and North Korea, the continuation of war and civil clashes in Syria, in addition to the presidential elections in France, which had an impact The risk in the financial markets increased, as investors increased their appetite to buy safe investments, especially gold and US treasury bonds, as well as the low-yielding currencies, which is the Japanese yen.

It is noteworthy that in mid-November the US dollar had plunged to its lowest level in five months against the Japanese yen as a result of the heavy demand from investors to buy the Japanese yen as a safe haven in the financial markets, based on the evaluation of many trading companies Like iFOREX evaluation And eToro and the Investing financial website, gold also soared high in the same week to cross the psychological level barrier at $1,260 an ounce, and gold reached this level for the first time on February 27, and since then gold has fallen to trade below that level.

Last Wednesday, the US 30-year bond rate fell to 2.94% from 3.17%, in a positive sign of increased demand for safe havens by investors in order to hedge against market volatility.

The continuation of the Syrian war

A state of panic and anxiety has prevailed in the financial markets since the military forces in the United States launched a missile strike on the Shayrat air base in Syria, which angered Russia, and as a result, Russian President Vladimir Putin said that US-Russia relations In great tension and at its worst, this affected the financial markets and made them suffer from a state of anticipation and caution.

The worsening crisis on the Korean peninsula

On the other hand, the United States of America announced last week that it was sending military aircraft carriers to the western Pacific near the Korean Peninsula because of the ballistic missiles fired by North Korea, and North Korea considered the advance of American forces as a security threat to it and that it had reached a dangerous stage. A prominent figure in the North Korean army said that his country is ready to strike the United States with nuclear weapons if it ignites the war with a preemptive strike, while US President “Donald Trump” said that the United States will deal with this problem with or without China’s help, while Russia commented saying that it is concerned about What is happening in the Korean region and warns of a preemptive strike by the United States against North Korea.

Waiting for the French presidential elections

Recent opinion polls have indicated progress Far-right candidate Marine Le Pen Over her rivals in the race for the Elysee Palace, where fears are growing about Le Pen's victory because she calls for France's secession from the European Union to follow Britain's path.

Reuters said that it is likely that the first round of the elections will result in the lead of Marine Le Pen, the candidate of the far-right party, and Emmanuel Macron, the candidate of the Center Party, with 23% each, while an opinion poll conducted by the “Elab” Foundation indicated that the conservative candidate had won. François Fillon, 19%, and Left Party candidate Jean-Luc Mélenchon, 17%.

The financial markets are awaiting with great interest what the French elections will decide in the next few days, especially after the wide changes in global politics and the widespread support for extremist parties in Western countries, especially after what we saw in Britain’s withdrawal from the European Union and the victory of “Donald Trump” in the presidency of the United States, contrary to what was expected. for him.

 

Mohamed Abdel Khaleq
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