The focus in the markets is on the risk of military escalation in the Middle East. Investors seem to be aware that there is currently no Israeli response to the Saturday attack by Iran. As a result, oil prices are falling, with Brent down 0.80% to below $90 a barrel at $89.69. Since the beginning of the year, the price has risen by over 16%. Gold, another safe haven asset, remains steady at its record high of $2,371 per ounce, with a slight decrease of 0.12%. The dollar, another safe haven, has also paused its rally, with the euro gaining 0.14% and now valued at $1.0657. Despite this, the euro has still lost nearly 3.5% against the dollar since the beginning of the year.
This cautious optimism is also reflected in the stock markets, with the Milan stock exchange opening up by 0.76%. This comes after two weeks of losses following 10 weeks of gains, with a decline of 1.61% last week. Other European indices, such as Frankfurt (+0.71%) and Paris (+0.51%), also started off in the green. London, however, is an exception with a 0.44% decline, weighed down by the fall in energy commodities and raw materials. The TA 35 index on the Tel Aviv stock exchange is up by 1.45%. In the US, futures indicate a positive start, with the beginning of quarterly earnings season and Goldman Sachs reporting today. In Asia, most stock markets were down overnight, except for Shanghai (+1.26%) and Shenzhen (+1.53%). Tomorrow, important data on China’s GDP for the first quarter is expected.
Overall, the markets are cautiously optimistic amid the current geopolitical tensions in the Middle East. The lack of immediate Israeli response to Iran’s attack has somewhat alleviated concerns and led to a decrease in oil prices. Safe haven assets like gold and the dollar have also paused their rally, with the euro gaining slightly against the dollar. In Europe, stock markets have started the day in positive territory, with some exceptions like London. In the US, the start of the quarterly earnings season is anticipated with Goldman Sachs reporting today. In Asia, most markets were down, but positive gains were seen in Shanghai and Shenzhen. The upcoming release of China’s GDP data for the first quarter will be closely watched for further market movement.
Despite the current optimism, the situation in the Middle East remains a key concern for investors. The lack of immediate response from Israel to Iran’s attack has provided some relief, but tensions could escalate quickly, leading to further market volatility. Oil prices, in particular, will continue to be closely monitored as any disruption in supply from the region could have significant impacts on the global economy. Safe haven assets like gold and the dollar may see fluctuations depending on how the situation unfolds. Stock markets in Europe and the US are showing resilience, but ongoing geopolitical developments could still impact investor sentiment. The upcoming earnings season will provide further insight into the health of companies amid the current geopolitical uncertainties. Overall, market participants are cautiously optimistic but remain vigilant in light of the potential risks ahead.
