Morning Note: Market News
Market News
Equity markets are trading slightly lower after the US airstrikes on Iran, while the dollar is higher and Treasuries have slipped. China and Russia condemned the US attack. Vladimir Putin is set to meet Iran’s foreign minister today. The UK and France distanced themselves from the strikes and called for a diplomatic solution.
The oil price was up nearly 6% at one point on fears that the strikes risk a retaliation from Iran that has voted to close the Strait of Hormuz where around 20% of the world’s oil passes through. Two empty supertankers U-turned in the Strait of Hormuz, sailing south and away from the mouth of the Persian Gulf. Brent Crude has settled back to $77 a barrel. Bloomberg sees Brent trading around $80-$90 in the near term even without any immediate supply disruption.
Global airline traffic may be at risk, particularly if flight restrictions to the hubs of Doha and Dubai were to occur, Bloomberg Intelligence said. British Airways and Singapore Airlines cancelled services to the Persian Gulf.
A rising oil price further muddies the outlook for inflation and interest rates. Mary Daly said the Fed’s policy stance is “in a good place,” with risks to employment and prices balanced. Gold trades at $3,355 an ounce.
The FTSE 100 is currently 0.2% lower at 8,757, with BP (+1.5%) and Shell (+1.0%) notable gainers. Sterling trades at $1.3438 and €1.1685.
Source: Bloomberg
