When Hamas attacked Israel in October, the biggest fear for many market participants was that Iran would ultimately be drawn into the fighting. Now as the conflict widens, many say oil could surpass US$100 a barrel and expect a flight to Treasuries, gold and the dollar, along with further stock-market losses.
Financial markets will face the new week fretting about geopolitics with much riding on whether Iran’s unprecedented weekend strike on Israel triggers rounds of retaliation.
With investors already rattled by sticky inflation and the prospect of higher-for-longer interest rates, the escalation of the Middle East crisis is set to inject fresh volatility when trading resumes.
