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15 Sep 2013
US and Russia outline diplomatic framework on Syria
FXstreet.com (Barcelona) - Asian markets reacted positively at the open, cheering up what is perceived as a headline likely to fuel risk-on appetite, as news hit the wires on a political U.S. / Russia deal for the Syrian crisis over the weekend.
Despite the easing in geopolitical tensions, there are still claims from both sides of the political spectrum in the U.S. implying the deal with Russia is a defeat by the US administration. In an interview with ABC over the weekend, Obama said limited military action should not be rule out just yet, should the Assad regime not comply to disarm its chemical arsenal.
In a joint news conference between US Secretary of State John Kerry and Russian Foreign Minister Sergei Lavrov, a framework document for Syria to surrender its chemical stockpiles was outlined, with Kerry calling Assad to live up to its commitments.
"There can be no room for games, or anything less than full compliance by the Assad regime," Kerry said, adding that "if diplomacy fails, the United States remains prepared to act", thus the threat of sanctions or military force remains.
On ABC, Obama sounded quite critical with Russia, saying "I don’t think that Mr Putin has the same values that we do. And I think – obviously – by protecting Mr Assad he has a different attitude about the Assad regime."
Obama also had a message for the Iranians, suspected of developing a nuclear program, noting "what the Iranians understand is that the nuclear issue is far larger for us than the chemical weapons issue", adding "my suspicion is that the Iranians recognise that they shouldn’t draw a lesson that we haven’t struck [Syria] to think we won’t strike Iran."
According to John Noonan, Head of IFR Markets: "The markets were already pricing out worst case scenarios regarding the Syrian crisis as seen by the big fall in gold last week and the strong gains made in EM assets."
Noonan added: "Expect a positive knee-jerk reaction in most risk assets now that geopolitical risks have been shoved further in the background and the international community is showing the kind of cooperative spirit that augurs well for the future."
Despite the easing in geopolitical tensions, there are still claims from both sides of the political spectrum in the U.S. implying the deal with Russia is a defeat by the US administration. In an interview with ABC over the weekend, Obama said limited military action should not be rule out just yet, should the Assad regime not comply to disarm its chemical arsenal.
In a joint news conference between US Secretary of State John Kerry and Russian Foreign Minister Sergei Lavrov, a framework document for Syria to surrender its chemical stockpiles was outlined, with Kerry calling Assad to live up to its commitments.
"There can be no room for games, or anything less than full compliance by the Assad regime," Kerry said, adding that "if diplomacy fails, the United States remains prepared to act", thus the threat of sanctions or military force remains.
On ABC, Obama sounded quite critical with Russia, saying "I don’t think that Mr Putin has the same values that we do. And I think – obviously – by protecting Mr Assad he has a different attitude about the Assad regime."
Obama also had a message for the Iranians, suspected of developing a nuclear program, noting "what the Iranians understand is that the nuclear issue is far larger for us than the chemical weapons issue", adding "my suspicion is that the Iranians recognise that they shouldn’t draw a lesson that we haven’t struck [Syria] to think we won’t strike Iran."
According to John Noonan, Head of IFR Markets: "The markets were already pricing out worst case scenarios regarding the Syrian crisis as seen by the big fall in gold last week and the strong gains made in EM assets."
Noonan added: "Expect a positive knee-jerk reaction in most risk assets now that geopolitical risks have been shoved further in the background and the international community is showing the kind of cooperative spirit that augurs well for the future."