Global financial markets already rattled by elevated interest rates now face a fresh dose of geopolitical uncertainty following Hamas’s surprise attack on Israel, reports Fortune.
Hamas’ surprise attack on Israel
Saturday’s strike and Israel’s subsequent declaration of war risk unnerving markets when they reopen Monday, with investors eyeing the reaction of the oil price as a guidepost, although crude traders aren’t anticipating an outsized surge.
Sentiment toward stocks could take a hit with IG’s Weekend Wall Street contract down about 0.4% at noon on Sunday in London. Bond traders will need to quickly determine if the clash is a reason to rush for the safety of the dollar, shunning higher yielding-debt, or to fear yet another bout of inflation.
The fallout in markets will likely be determined by whether conflict spreads to the rest of the Middle East region. Iran is both major oil producer and supporter of Hamas.
“Geopolitical crises in the Middle East have usually caused oil prices to rise and stock prices to fall,” said Ed Yardeni, president of Yardeni Research Inc. “Much will depend on whether the crisis turns out to be another short-term flare-up or something much bigger like a war between Israel and Iran.”
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Source: Fortune
