investingLive Asia-Pacific market news wrap: Oil jumps as Iran and Israel trade strikes
- Iran and Yemen launch missiles towards Israel
- Explosions heard in Tehran and elsewhere in Iran
- Goldman Sachs drops call for December Fed rate cut
- Reports/rumors of explosions at Prince Sultan Air Base in Saudi Arabia
- Head of US equity and quant strategy at BoA sees too many red flags in stock markets
- Japan Q1 GDP (second reading) 1.8% q/q annualized vs 1.3% expected
- Trump: Israel will have 'no choice’ but to accept deal with Iran
- Netanyahu “more or less" agreed to wait on striking back on Iran
- UK foreign min: Conflict between Iran and Israel is in no one’s interest. S&P futures fall
- Trump says Iran close to a deal, doesn’t want to blow it up over Beirut and Iran strikes
- Iran weekend news: OPEC+ continues the charade, negotiations appear stuck, Beirut hit
Markets:
- WTI crude oil up $3.33 to $93.53
- US 10-year yields up 3 bps to 4.56%
- Gold down $22 to $4306
- EUR leads, CHF lags
- S&P 500 futures up 0.2%
- Nikkei down 3.6%
The weekend and Monday featured a full dose of Middle East drama. It started with Israeli strikes on Sunday on Beirut. That was followed by Iran on Monday firing a volley at Israel. In response, Israel struck roughly 10 targets in Iran. That’s since been followed by launches from Yemen and perhaps Iran at Israel. So far they’ve been intercepted.
In between, Trump (and multiple reports) said Trump had asked Israel not to respond and that they’d agreed. Needless to say, those reports were wrong or Bibi didn’t listen. Notably though, the US military advertised missiles or objects (likely Israeli fighters) over Jordan more than an hour before the strikes. Iran’s airport was also evacuated before it was struck.
I tend to think the market liked that, and maybe took that as a sign of the US trying to de-escalate and Trump trying to make a deal. He once again said it was close and the market liked that and still appears to. S&P 500 futures opened down 0.6%, then rose to +0.2% before turning red again on the Israeli strikes and then bouncing back to +0.2%.
Oil opened strongly, then faded before climbing again on strikes.
The bigger story in the day ahead might be tech stocks after Friday’s rout. South Korean stocks precipitated Friday’s move and the price action today isn’t encouraging as the Kospi briefly fell nearly 10% and only managed to cut that in half. Nvidia’s Jensen Huang cut a deal with SK hynix but that hasn’t helped it much so far (though I think it could later). He also continues to throw his weight around saying the latest dip was an opportunity to buy.
In FX, there were no signs of Japanese intervention and volatility in the yen was low, but eyes remain fixed on the pair. The overall tone is slightly positive in currencies, though gold is lower again. Notably, bitcoin has bounced to $63K after falling below $60K on Friday.
Eamonn will be back tomorrow.
This article was written by Adam Button at investinglive.com.