Maduro's arrest could boost markets, says analyst.
According to a Frankfurt-based analyst, stock markets are likely to react positively after the U.S. capture of Venezuelan president Nicolás Maduro, due to expectations of increased oil production in the country.
"It's true that it will take some time before actual oil production in Venezuela resumes increasing. We know that markets often trade on expectations and forecasts. And in this scenario, the expectation is that Venezuela's oil production will increase in the coming months and years," Carsten Brzeski, chief economist at ING, told Reuters.
Global investors will also face a new rise in geopolitical risk following the U.S. action, which could unlock the country's vast oil reserves and boost risk assets in the long term, but trigger a flight to safety when negotiations resume.
The president Donald Trump stated that the U.S. would take control of the oil-producing nation, while Maduro, whom the U.S. repeatedly accuses of leading a "narco-state" and rigging elections, was in a detention center in New York on Sunday (4), awaiting formal charges.
Washington has not carried out such a direct intervention in Latin America since the invasion of Panama in 1989.
"What the U.S. attack on Venezuela means, in my opinion, is clearly that the U.S. has demonstrated its military power, or, as they themselves said, their military strength.
It's a clear signal that the U.S. wants greater influence in the Western Hemisphere, and for Europe, this should be yet another warning to finally organize itself," said Brzeski.
Markets were closed when the attacks occurred, but had started the first trading day of the year on a positive note, with Wall Street indices closing higher and the dollar strengthening against a basket of major currencies on Friday (2).
Source: CNN Brasil
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