Bond yields rise, oil prices drop
Oil prices fell sharply and government bond yields rose on Monday on expectations that the weekend's missile attacks on Syria would not mark the start of greater Western involvement in the conflict. European shares were broadly flat, however, adding to a mixed picture in Asian stock markets and suggesting that a degree of caution prevails.
While last week's bid for investment safety in top-rated government bonds unwound, other traditional havens in times of global political tension held firmer. Gold prices were little changed, while Japan's yen and the Swiss franc were higher than levels late on Friday.
"There is some relief that a direct confrontation between the US and Russia over Syria has been avoided," said DZ Bank rate strategist Daniel Lenz after Russian President Putin warned on Sunday that further Western attacks in Syria would bring chaos to world affairs.
Saturday's strikes marked the biggest intervention by Western countries against Syrian President Bashar al-Assad and his ally Russia, which is facing further economic sanctions over its role in the conflict. The US, Britain and France said the missile strikes targeted Syria's chemical weapons capabilities.