Public Markets 8-Hour Briefing
×Market Volatility Amid Middle East Conflict
European shares headed for their worst weekly decline since April as the war in Iran showed no sign of nearing a resolution. Emerging-market equities and currencies are set for the biggest weekly decline since the height of the pandemic in 2020, with overseas investors pulling money out of emerging Asian stocks at the fastest pace in nearly four years.
Asian high-yield dollar bonds are getting disproportionately hit compared with global peers as the escalating Iran conflict underscores the region's reliance on imported energy. Meanwhile, Chinese markets have held up better than their Asian peers during the global market selloff caused by the war in Iran.
Energy Crisis and Supply Disruptions
Oil prices retreated while Asian equities were mixed at the end of a volatile week as investor sentiment continued to be undermined by the conflict in the Middle East. A 10% increase in energy prices that persists for a year would push global inflation up by 40 basis points and slow economic growth by 0.1-0.2%, according to the IMF.
Maritime traffic in the Strait of Hormuz has ground to a near-complete halt, with no oil shipments going through in the past 24 hours, as the Middle East war disrupts the vital waterway. Sanctioned Russian liquefied natural gas vessels are redirecting away from the Mediterranean Sea after one was allegedly attacked by Ukrainian drone boats.
Corporate and Investment Moves
TA Associates is considering selling bubble-tea maker Gong cha, according to people with knowledge of the matter. KKR & Co. is seeking a $500 million loan to back its acquisition of a majority stake in school operator XCL Education Holdings Pte.
Blackstone is positioning Liftoff Mobile for an IPO as the military and aviation supplier said it was well-positioned to tap into the momentum of rising European defense budgets. Hongkong Land Holdings Chief Executive Michael Smith tells BTV the commercial property market in Hong Kong is seeing a "great rebound."
Regional Economic Impact
Poland will likely abstain from interest-rate cuts for as long as the armed conflict in Iran lasts, according to policymaker Henryk Wnorowski. Central banks across developing Asia are facing a sudden shift in their policy outlook as traders ramp up bets on an Iran war-driven oil shock.
The Philippine Central Bank Governor warns that oil rising toward $100 per barrel could push Philippine inflation beyond the BSP's 2%-4% target range. Malaysia's Second Finance Minister says his country is within the safe zone of its economic forecasts, though the currency has come under pressure.
Technology and Innovation
China has refrained from setting ambitious goals for solar energy in its latest five-year plan, highlighting the sector's mounting challenges after years of explosive growth. India's refiners are moving quickly to buy Russian oil, with millions of barrels floating in Asian waters offering a quick fix to a Middle East supply crunch after the US relaxed restrictions.
Apple is making headlines with its latest product launch, while Bitcoin fell to $70k amid Iran conflict but is set for a weekly jump. Microsoft's energy chief says the oil and gas price shocks triggered by conflict reignite discussion about building defenses to volatile fuel costs.
Defense and Aerospace
Aluminum headed for its biggest weekly gain since 2024 after deepening conflict in the Middle East snarled shipments from the region. Vincorion plans a Frankfurt listing as European defense spending rises, positioning itself to tap into momentum from rising European defense budgets.
Japan's Denso has made an $8 billion bid for Japanese chipmaker Rohm as Tokyo seeks to consolidate the sector to compete against China. China's 10-passenger electric aircraft, the Matrix, hints at how big flying taxis can be as the country continues its push into advanced aviation technology.