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Via a Morgan Stanley overnight note, this snippet is on developments re Syria and how to trade
US President Trump reportedly cancelled a visit to Peru as the administration focus has shifted to fleshing out a response to the latest developments in Syria.
- While there has been a hawkish personnel shift within the US administration, we note that the market's reaction to the April 2017 airstrikes by the US in Syria did not have a lasting impact on risk appetite.
While geopolitical risk premium has increased as evidenced by higher oil prices, it will not necessarily derail the broader risk backdrop, in our view.
- Accordingly, we view any potential safe-haven bid to the JPY as a selling opportunity, targeting 110 for USDJPY.
- If, on the other hand, developments would warrant a larger setback to risk, short AUD crosses should perform well. We still see AUDUSD at 0.7770 as a good selling opportunity.
(bolding mine)
