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Summarising the current impact of Israel-Gaza-Iran tensions on financial markets
Description
Edmund Shing, Chief Investment Officer and Guy Ertz, Chief Investment Advisor, at BNP Paribas Wealth Management, discuss the impact of escalating geopolitical tensions in the Middle East.
Israel-Gaza tensions have been evident since October 2023, so not a new situation;
Global diplomatic efforts have intensified in an effort to avoid escalation of tensions;
Brent crude oil price around $90/barrel already incorporates a substantial geopolitical risk premium, but which has not increased of late;
Gold prices continue to rise towards $2400/ounce, but driven not by investor safe-haven demand, rather by central bank and Chinese consumer buying;
Previous periods of regional conflict have had a surprisingly limited and short-term impact on global financial markets historically;
Bigger impact on markets thus far has rather come from upside US inflation and growth surprises pushing US Treasury yields and US dollar higher, pressuring stock markets after a strong 6-month advance
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