War in the Middle East Rocks Markets
Global financial markets have seen big moves on the weekly open today as they react to the weekend’s attack on Israel and the consequent retaliatory actions. The market had reacted to a stronger-than-expected non-Farms number on Friday in a more muted fashion than many may have expected but volatility has kicked in this morning with haven trades taking the lead. Gold gapped higher and jumped $20 in short order and not surprisingly Oil also gapped to the topside, WTI opening $2.5 higher than Friday’s close. Investors are expecting more volatility as we move through the trading day, especially once we hit another fresh day in the Middle East.
Safe Haven Trades in Focus for Investors
Traders are expecting more volatility across financial markets in the days and weeks ahead as the conflict in Israel threatens to escalate. Safe haven trades will be front, and center of investor focus as they fluctuate in line with updates on the conflict and the potential for any swift settlement. The real fear across markets and indeed across the region is if the crisis spreads outside the border conflict between Israel and Gaza with talk already on the wires that Iran was involved in the planning. If this side of things does look to escalate, expect harder and stronger moves in Gold, Oil, JPY, CHF and the dollar to accelerate, as well as further downside pressure on stocks as the implications for global growth hit investor expectations.
All eyes on Newswires Ahead for Traders
The economic event calendar is looking very light today, but traders will have their attention fixed to the newswires as updates from the war zone in the Middle East are set to dominate market moves. Bank holidays in Japan, Canada and the US will affect liquidity and some moves may become even more exacerbated in lighter trading conditions. In the US session we do hear from FOMC members Barr and Logan but overall expect geo-political concerns to dominate the market today.
