The reaction to the death of terror mastermind Osama Bin Laden has had what feels like a very limited impact on key financial markets, particularly if you go back and relive the week after the markets opened after the 9/11 attacks.  Perhaps it was that holidays were seen in some international markets today, but it may also be that the real markets impacted are not the same markets that investors flocked to with as much regularity back in 2001 when the 9/11 attacks were carried out.  The real impact was initially seen in currency markets, which of course rubs off on gold, silver, oil, and other global commodities faster than many investors can even react to.

Stocks are higher but not with the fervor many might have hoped for with the DJIA only up 40 points and with the S&P 500 up about 3 points.  The move so far is having the following impact:

• Crude Oil is down $1.57 or 1.4% at $112.36 per barrel;
• Natural Gas is down $0.04 or almost down 0.9% at $4.72;
• Gold was down about $1.00 around $1,555.00 per ounce;
• Silver was where the biggest drop was with a $3.14 drop (-6.5%) at $45.46/oz.
• 10 Year T-Note 3.297% (up 0.03)
• 30-Year T-Bond 4.403% (effectively flat)

We are tracking the key exchange traded funds and exchange traded products on the news immediately after the open of the markets:

iShares Silver Trust (NYSE: SLV) down 6.6% at $43.82 and ETFS Physical Silver Shares (NYSE: SIVR) is down 9.2% at $43.50; SPDR Gold Shares (NYSE: GLD) is down 0.55% at $151.53. Silver had already been indicated down considerably before the Bin Laden news broke.

United States Oil (NYSE: USO) is down less than 0.4% at $44.99 and the nearly uncorrelated ETP for gas of the United States Natural Gas (NYSE: UNG) is down 0.1% at $12.05.

Whatever the currency impact was is slowing, at least as far as the PowerShares DB US Dollar Index Bullish (NYSE: UUP) is concerned, as it is now down 0.1% at $20.93.  The impact has also been muted in the anti-bond ETF of the ProShares UltraShort 20+ Year Treasury (NYSE: TBT).

Unfortunately there is only so much that one man’s death, even Osama Bin Laden, is worth.  The new fear is that this news will embolden many of the splint terror groups to increase their activities in the days, weeks, and months ahead.  This begs a question… Is the Bin Laden death what the Fed would call “transitory”?

JON C. OGG

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