Making sense of this crazy world
Separating the sensational and emotive news flow from the markets is not easy because, of course, some are interlinked. Importantly, some aren’t!
The markets are responding to Trump’s comments, but they are not entirely convinced as to his rhetoric. He has a history of overpromising and then settling on something less extreme. The markets, and indeed the oil price, responded positively to suggestions that the war would be over soon, but elevated tensions and direct hits on shipping, particularly oil tankers, have caused markets to recalibrate.
This commentary is again all about what’s happening in the Middle East, the possible implications and a focus on some specific countries and regions.
Much of the ground was covered last week, and we are still in a state of high alert with uncertainty dominating mindsets.
Iran says the only chance of a ceasefire is if the US and Israel pledge never to strike the country again. Trump vows to ‘finish the job’.
Our overriding sentiment for clients, unless they are day trading or trading currencies, is to stay where they are. Matters can change very quickly, as was shown earlier in the week after Trump’s statement that the mission on Iran was nearly complete.
Fund managers are looking to buy the dip in Asian stocks, with India hoping for a resolution soon.
Much of today’s material has been paraphrased from Bloomberg articles, as they have covered the conflict really well in my opinion, offering a good sense of perspective. There are, however, other contributors as well.
This week’s content:
- The escalation of attacks seemingly prolongs the conflict
- Trump announces massive release of emergency oil reserves
- Oil prices fall, and then rise again as global stocks retreat
- Bond markets don’t like what’s happening either
- Software stocks rise from recent lows
- Fund managers looking to buy the dip in Asia
- Indian equities struggle with the Middle East conflict
- Global air fares rocket
- Conclusion
The escalation of attacks seemingly prolongs the conflict
Iran escalated attacks on parts of Dubai and shipping assets, pushing oil prices up and causing more concern about the length of the Middle East war and the effective closure of the Strait of Hormuz.
Iran’s new supreme leader has stated that the Strait of Hormuz should remain shut and Tehran will look to open other fronts if the war between them, the US and Israel continues.
The intention is to choke the supplies of oil and gas so that global energy prices continue to surge. His statement comes as Trump said, “preventing Iran from having nuclear weapons and being a threat to the Middle East, is of far greater interest and importance to me than the cost of oil”.
Continues…
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