Weekend Review: Tensions Between Iran and Israel Rise. On Friday, the volatility play continued in the United States. On this day, the stock market lost hundreds of points but managed to end the day in the positive territory. This was a positive ending to one of the worst weeks in the U.S stock market.
During the weekend, the world’s eyes turned to South Korea where the country is hosting the Winter Olympics. Among the attendants to the event are United States’ Vice President, Mike Pence and Kim Jong Un’s sister, Kim Yo-Jong. This event marks the closest the United States delegation and that of North Korea have had in recent times.
As you recall, last year, the tensions between the two countries grew as North Korea tested several missiles, with one going above Japan. At some point, the world was on edge waiting for tensions between the two countries to increase.
Another major issue during the weekend was the increasing tensions in the Middle East. On Saturday, Israel launched several drone attacks in Syria. While Israel has always been involved in the crisis in Syria, it had never launched attacks aimed at Iran. As the attacks went on, an Israeli jet was shot down, with the two pilots surviving. These actions will further increase risks in the region which could have major implications on the price of crude oil. As of this writing, Brent crude is up 83 bps while WTI is down 319 bps.
In Washington, the fallout continued about sexual harassment claims. As you recall, last week, the White House was forced to fire two senior officers as the #MeToo campaign intensified. The chaos continued as Donald Trump differed with his trusted chief of Staff, John Kerry. He also seemed to support the fired officials.
All this came as the deadline for a DACA deal is fast approaching. A few years ago, Obama signed an executive order offering temporary legal protection for people brought to the country as kids. During the campaign, Trump promised to end the program and deport the millions. In September, he did that and asked congress to come up with a bill to shield them from deportation.
During the weekend, republican senators introduced a bill, which is based on Trump’s key points. The bill is unlikely to pass, which could introduce more deadlock in Washington. The dollar is down 34 bps.
In South Africa, the new ANC leader, Ceril Ramaphosa promised to solve the deadlock regarding Jacob Zuma on Monday. Jacob Zuma, the third president in the country has been accused of corruption and mismanaging the country. Today, we will wait for the decision on how the country will go on. At the end, there are doubts that Zuma will complete his term in office.
During the weekend, the cryptocurrencies continued to do well. Last week, following a stream of negative data, the cryptocurrencies went down to the lowest level since October last year. Bitcoin briefly touched the $5,800 level. Following a senate meeting, bitcoin traders felt confident that the US may move to regulate the industry, instead of issuing a complete ban. As of this writing, bitcoin is up 4% while Dash and ethereum are up 5% and 2.6% respectively.