Opening Bell: Gold, Yen, Treasurys Slip; Oil Slides; Futures Climb

There is a chance that the timing of the attack in Syria may have taken into consideration financial markets. An attack during the week would have almost certainly prompted widespread knee-jerk selloffs. Having found out about the military action after Friday's close, investors have now had the chance to temper their initial reactions and process the news. Risk-off is dissipating, probably because the headwind of a counter-attack from Russia has so far not materialized, quelling fears of escalation.

Despite Trump's confident "Mission Accomplished" tweet on Sunday, reports suggested that there was no meaningful damage to military installations or in terms of casualties. So, while Vasily Nebenzya, Russia's UN Ambassador, warned that he 'cannot exclude' the odds of a fully-fledged war, Russia's lack of response could have been predicted given recent incursions into Syria by other nations.

In September, Israeli air forces struck a Syrian weapons development center in Hama province; a month later an anti-aircraft battery near Damascus was targeted and in December weapons warehouses near the capital were hit. In January and February, they struck various other Syrian and Iranian military posts and more recently, on April 9, they bombed the T-4 airbase in Homs province, killing several Iranian military officers.

In none of these cases did Russia's air defense forces strike back. This seems to underpin their strategy of talking tough while not taking risks on the ground.

If Russia hasn't responded to Israel, it's highly likely that it would respond to the US. Still, Russian financial markets have been hit hard by renewed US sanctions. The situation could get worse as the prospect of further restrictions is likely. An already wounded party that comes under mounting pressure is just as likely to strike back as it is to attempt an escape.

While the risk of a fresh batch of US sanctions and broader geopolitical worries continue to weigh on investor sentiment, the focus is turning to corporate earnings season which begins in earnest this week. Speeches by Federal Reserve officials, including incoming New York Fed Chair John Williams, will also be monitored closely.

Friday's 0.29 percent decline on the S&P 500 was led by losses in Financials stocks (-1.51 percent), after Wells Fargo (NYSE:NYSE:WFC), JPMorgan Chase (NYSE:JPM) and Citigroup (NYSE:NYSE:C) reported higher-than-expected earnings results but subdued forward guidance.

The dollar slipped after data from the US Commodity Futures Trading Commission showed that hedge funds are the most bearish on the greenback in five years.

Last week, Fitch Ratings reaffirmed the AAA rating for the US but warned that "the outlook for public finances has deteriorated since the last review." The ratings agency said the US has the world's highest "debt tolerance" thanks to the dollar's global reserve currency status.

However, two elements threaten to challenge the global primacy of the USD: worldwide, central banks are mulling a conversion of some of their reserves to euro and China's recent launch of yuan-denominated oil futures contracts.

The lack of any significant response to the missile attack in Syria has shifted the market narrative towards fears of a further increase in production, sending WTI futures back below $67 a barrel. Russia and Iran could back down from the supply limits agreed upon among OPEC members, while Saudi Arabia is threatening to build a nuclear arsenal if the US doesn't renew its sanctions against Iran. Technically, the bullish Ascending Triangle's upper bound is so far providing support.