Another day in the mid-2020s, another wild session for Markets.
The world learnt that a military intervention in Iran had commenced on Saturday, where US and Israeli forces began striking the government and army infrastructures of the Islamic regime in Iran.
The conflict had been foreshadowed for a while now, with historic revolts in the Persian region that saw brutal repression, leading to +30,000 deaths (casualty numbers are from late January, no official update since).
President Trump had expressed that he would not allow the regime to persecute its citizens. The history of the US-Iran conflict now comes a long way, with the Mullahs taking power in 1979 and declaring that one of their core beliefs and motives is: “Death to America, death to Israel”.
Ali Khamenei, the successor of Ruhollah Khomeini and Ayatollah of Iran, was killed during the first hours of the conflict.
The Iranian regime had since established a spiderweb influence against Western civilizations through repression and ideology, notably sponsoring militias like Hamas, the Houthis in Yemen, supporting the Al-Assad regime in Syria, and others like Hezbollah in Lebanon, which entered the conflict this morning – Their leader also got killed this morning. Iran has also been a long-time partner of Russia and a provider of weapons in their conflict against Ukraine.
The conflict already spread to the UAE, Jordan, Kuwait, Bahrain, Qatar, and other Gulf countries that were targeted as retaliation by the IRGC.
What concerns Markets are the impact of a prolonged war, particularly on Oil and inflation expectations. This concerns particularly the Strait of Hormuz, where roughly 20% of global Energy commodities flow, particularly towards the Asian continent.
The weekly Globex open saw significant gaps higher in Oil, Natural Gas, and most energy products; the opposite was seen in Global Stock Market futures, which then recovered particularly in the North American session, while the US Dollar ran higher, buoyed by safe-haven inflows into the Reserve Currency.
Paradoxically, the risk-off flows did not sustain bids in Bonds, which retracted significantly from their Friday close. Let’s discover more Market flows right below.
