The markets have calmed with the downturn in rhetoric regarding the Syrian situation the past twenty-four hours. The U.K. has come down from its high wire regarding its threats and Prime Minister Cameron looks to have some work in front of him in order to convince the Labour Party to support Conservatives via a call to arms in the Middle East. And across the Atlantic President Obama is proving that he is none too keen to put his political neck on the line. Although White House officials continue to point their fingers at Syria they have shown that they are not willing to take military action alone.

The markets which turned risk averse the past two days have shown a taste for risk taking as of early trading today. Asian bourses have mustered gains and the JPY has weakened against the USD. The JPY has had a good range the past week having gained in value, but deftly fallen back, thus giving traders with patience an opportunity to take advantage of the price action

The EUR grew weaker against the USD, and the GBP also declined yesterday against the Greenback. But why? While BoE Governor Mark Carney took the podium and outlined his beliefs about the Sterling and the U.K. economy, the GBP went on a sudden roller coaster ride, but as the day drew to a close the GBP resumed a decline. It should be noted the GBP is still within the higher realms of its value and that it did gain against the Single Currency on Wednesday.

Wall Street which has slumped for nearly three weeks turned in some gains yesterday. While some pointed to the political tension coming from the Middle East as a reason for a poor day of trading on Tuesday, and for gains yesterday as fears of intervention lessened, equities have not done well in August and results must be looked at more closely than a mere three-day pang. Many investors are uncomfortable with the stance the Federal Reserve has taken and trying to figure out exactly if and when tapering will begin and what the size of the shift in monetary policy will be when it happens. Preliminary GDP numbers will come from the U.S. today and the expected result is a gain of 2.2%.

From Europe the German elections are becoming a point of interest as politicians start to amp up their debating and complaints. Angela Merkel was quoted as saying she believes that Greece should not have been allowed to join the Single Currency yesterday. While most in Germany agree with her, the comments were not well received in Greece, nor some other nations on the continent who do not want the Germans dictating policy. Italy has quietly walked through a political crisis too this past week involving – the one and only – Silvio Berlusconi.

So while the summer starts to vanish the political sphere and its implications on the global economy have started to resonate again, this as investors start to prepare themselves for returning to their offices. (Stiff drink please – neat). It has beenDigital Markets Advisor‘s position that volatility will be felt come the end of this September and in October within FX, commodities, and equities. Economic data will also start to be examined under the microscope again in a strong way and there are suspicions that the American consumer is not as vibrant as had been hoped for, this as buying for ‘back to school‘ items appears to have been lackluster.

Volumes in the broad markets are thin. Summer holidays are in full boil within Europe and the States has a long holiday weekend coming up via Labor Day. Because of this and the current news coming from the Middle East, traders should expect some swift ranges depending on rumors swirling.

Gold went to short-term highs two days ago but has grown more tranquil and again finds itself within a fairly tame range. The precious metal is around 1407.00 as of this writing. Crude Oil has seen volatility too and is trading near the higher parts of its range. WTI appears to be over valued when taking into consideration fundamental demand ratios, but must be traded carefully.  The question is how much risk are traders going to take these next two-days with the overhang of a possible conflict in Syria mounting and a long weekend coming from the States? Risk taking appears to be the flavor of the day, but when Friday evening rolls around many will likely decide not to hold onto positions.