Public Markets 8-Hour Briefing
×Market Performance & Equities
US stock futures ticked up after Wall Street extended its selloff amid the oil price spike. Chinese markets have weathered the Iran war turmoil better than their Asian peers, while global funds are pulling money out of Asia at the fastest pace in nearly four years. Emerging-market equities and currencies are set for their biggest weekly decline since the pandemic height in 2020.
Commodities & Energy
Strait of Hormuz shipping is at near-total halt with no oil shipments going through in the past 24 hours. Goldman Sachs says Brent crude crossing $100 per barrel is a "possible" scenario if the Strait of Hormuz experiences several weeks of disruption. Power prices in Europe swung wildly, rising almost 20-fold in hours as solar gave way to natural gas made scarce by the Middle East war. The IMF warns that a 10% increase in energy prices for a year would push global inflation up by 40 basis points.
Safe Havens Under Pressure
Traditional safe havens including Treasuries, the yen, Swiss franc and gold have offered investors no refuge this week. Gold recaptured some losses but remained on track for its first weekly decline in more than a month, pressured by a stronger US dollar. Geopolitics and the global macro backdrop remain supportive of gold despite the recent price action.
Central Bank Policy Shifts
Poland will likely abstain from interest-rate cuts for as long as the armed conflict in Iran lasts, according to policymaker Henryk Wnorowski. Rate cut bets are unraveling across developing Asia as the Iran war drives oil prices higher. Asia's foreign-exchange reserves totaling $8 trillion are giving central banks more firepower to defend their currencies as the escalating Middle East war drives up energy prices. Turkey has spent $12 billion, equal to roughly 15% of its foreign-currency reserves, to keep the lira stable during market volatility.