STRAIT TO THE POINT
Ongoing tensions between Israel-Iran weighed on markets last week. Tensions in the region further escalated after the US carried out strikes on 3 Iranian nuclear facilities over the weekend. Oil futures are higher this morning as investor concerns turn to the Strait of Hormuz and the possibility that global oil shipping may be impacted.
Developments in the Middle East are likely to remain in focus this week. Elsewhere, consumer confidence data on Tuesday and US job numbers on Thursday are likely to be of interest.
Middle East tensions were in focus last week as Israel and Iran continued to exchange air strikes throughout the week. Over the weekend, the US administration announced that it had conducted strikes on 3 Iranian nuclear facilities.
US Vice-President JD Vance stated over the weekend that the US is not at war with Iran but was at war with the Iranian nuclear programme. He stated that the US has no interest in getting involved in a drawn out conflict. In any case, investors are now more concerned that global oil shipments from the Persian Gulf could be disrupted and oil futures rose on Sunday night.
The US Federal Reserve kept rates on hold last week (as expected). Policymaker projections show that two rate cuts are still seen in 2025 but the outlook is complex - growth projections were reduced to 1.4% while inflation projections rose to 3.1%.
Global equities faltered as Middle East tensions rose. This left the S&P 500 down by 0.2% for the week while the Stoxx Europe 600 was 1.5% lower.
Tensions in the Middle-East added to growth concerns, fuelled by the possibility of a rise in oil prices. As a result, bond yields fell (bond prices rise as yields fall) again last week with the US Treasury 10-year yield down to 4.38% while that for the equivalent German bund declined slightly to 2.51%.
- Mon 23rd US - Global PMIs
- Tue 24th US - Consumer confidence • Germany - IFO business survey
- Thu 26th US - Initial jobless claims • Germany - GfK consumer confidence
- Fri 27th US - Personal income
This is intended as a general review of investment market conditions. It does not constitute investment advice and has not been prepared based on the financial needs or objectives of any particular person.