Markets this morning are met with the news that parliament has defeated two votes on military action in Syria, a result keenly awaited. Fear-linked instruments such as gold and dollars have been sold lightly, indicating that participants are taking news flow as it comes and are not getting ahead of known information. If the market is to be believed, the financial implications of this crisis are at least not thought to be more severe than could be reasonably expected.
More broadly, markets are holding well. Many commentators are speaking of edginess and fear. But given the distinct lack of selling and absence of sharp moves lower, this market is quite clearly more robust than it was. With tapering, a potential conflict on the horizon and all-time highs for equities not a distant memory, prices could have reacted much more severely.