Public Markets 3d Briefing
×Market Turmoil
Stocks declined bloomberg.com as the US and Israel launched strikes on Iran, with crude oil rising and investors trimming risk exposure. Emerging-market currencies bloomberg.com slumped in Asia trading as worries over the Iran conflict and surging oil prices weighed on sentiment for risky assets. Treasuries pushed lower bloomberg.com across the curve as reports of conciliatory messages from both the US and Iran damped demand for haven assets.
Oil & Energy Markets
Oil prices surged bloomberg.com by as much as 13% to above $82 a barrel at the open on Monday, with markets bracing for prolonged volatility and sustained disruptions in the Strait of Hormuz. European natural gas prices bloomberg.com could more than double if shipping through the Strait of Hormuz is halted for one month, according to Goldman Sachs. Aluminum climbed bloomberg.com on concerns that critical supply routes for Middle Eastern producers will be disrupted by conflict in a region responsible for a significant chunk of global output.
Currency & Emerging Markets
Indonesia's central bank bloomberg.com said it is intervening in the foreign-exchange markets as the US-Israeli war sapped sentiment for the currency. The Singapore dollar weakened wsj.com against its US counterpart in the Asian session amid the Middle East conflict. The Australian dollar bloomberg.com has scope to extend its advance versus the greenback, strategists say, even as speculative bullish bets on the currency stay near the highest level in more than eight years.
Geopolitical Developments
President Trump bloomberg.com said the US suffered its first casualties in the war with Iran, as three US service members were killed and five "seriously wounded" during operations against the Islamic Republic. Former US Deputy Secretary of State Wendy Sherman bloomberg.com said "Iran has many layers, it has succession plans. It will have a difficult time but they are not splinterable easily." Former National Security Advisor John Bolton bloomberg.com discussed regime change in Iran, saying the Iranian people will have a chance to take back their country.
Commodity Markets
Gold rose for a fourth day bloomberg.com as war in the Middle East rattled markets and drove investors to safer assets. Gold jumped 2% investing.com amid widening US-Israel conflict with Iran. Gold wagers hit a 16-week high bloomberg.com as risk-off sentiment grew. WTI crude futures rose above $80 a barrel as the Middle East conflict escalated.
Regional Market Impact
Saudi Arabian and Egyptian stocks fell bloomberg.com on Sunday, in one of the first signs of the US-Iran war hitting the region's financial markets. Australian liquefied natural gas exporters bloomberg.com surged after tankers stopped crossing the Strait of Hormuz, hampering about a fifth of global supply and threatening to raise prices of the fuel. Japanese stocks slid bloomberg.com in Tokyo after US-Israeli strikes stoked caution across sectors from banks to autos.
Market Sentiment
Traders are looking to commodity markets for cues as to the duration of the conflict following US and Israeli strikes on Iran. Analysts say Iran conflict ft.com likely to increase cost of crude by 5-15% when markets reopen on Sunday. Bitcoin slipped to $66k investing.com as Middle East conflict sparked risk-off wave. European stocks fell as the Iran conflict unfolded, with investors trimming risk exposure.
Economic Implications
Rising oil prices risk delivering a fresh inflation shock to Japan bloomberg.com, complicating Prime Minister Sanae Takaichi's efforts to ease cost-of-living pressures, according to Monex Group's Jesper Koll. Economists are assessing bloomberg.com the impact of the real war in the Middle East, having modeled the impact of US President Donald Trump's chaotic trade war for the past year. The US dollar's traditional role bloomberg.com as the currency of choice in times of uncertainty is increasingly in question, leading to a weak currency, according to European Central Bank Governing Council member Isabel Schnabel.
Market Strategy
Energy and defense companies bloomberg.com are being viewed as potential havens as traders brace for a volatile and risk-off open to the week for global stock markets after the US and Israeli attack on Iran. European natural gas prices could more than double if shipping through the Strait of Hormuz is halted for one month, according to Goldman Sachs Group Inc. Oil prices could rise further on Hormuz delays, analysts say, as Brent jumped by as much as 13% to above $82 a barrel at the open on Monday.