 Asian markets opened the week lower following the US military strikes on Iranian nuclear sites, marking a dramatic escalation in the Middle East. However, losses were limited and short-lived, with major indexes across the region quickly recovering earlier declines. Oil prices also staged a muted response. While WTI spiked on the news, the rally has since moderated. There was no sign of panic selling (or buying in oil, suggesting that investors view the situation as contained for now. The tempered market reaction could be attributed to a sense of relief that a perceived nuclear threat in the region has been neutralized. Moreover, the conflict is currently isolated, with limited risk of broader regional contagion, at least in the near term. Still, markets are not complacent. The possibility of Iran retaliating by disrupting oil shipments through the Strait of Hormuz remains a critical risk. The waterway handles roughly 20% of global crude flows, and any closure or threat to shipping lanes could propel WTI well above 100, as some analysts have warned. In currency markets, nevertheless, safe haven demand is clearly evident. Swiss Franc is the strongest performer of the day so far. Dollar followed as it continues to benefit from Middle East tensions. Euro is also firmer, supported by its perceived reserve status. In contrast, commodity currencies such as the Aussie and Loonie are under pressure, alongside Yen and Pound...... |
