#IsraelIranConflict
Following the airstrike carried out by Israel inside Iranian territory, which the Israeli Defense Minister described as a 'preemptive strike', global markets face a critical challenge: Will they succeed in containing the repercussions of this sudden geopolitical escalation?
These tensions immediately cast shadows over market indicators, as oil prices rose while Asian stocks and US stock futures fell, with the dollar regaining its previous losses as investors increasingly leaned towards abandoning high-risk assets.
The coming hours will determine the fate of the market: Scenarios for the Iranian response.
Analysts believe that the next few days will be crucial in determining market direction. News headlines about the Israeli strike have reignited geopolitical fears, and the continuation of this cautious mood depends on the nature of Tehran's reaction in the next 24 to 48 hours.
Scenario 1: Limited containment.
If the Iranian response is limited and energy flows continue uninterrupted, historical experience suggests that the risk wave may fade quickly. In such cases, markets tend to absorb initial shocks and return to their fundamental path.
Scenario 2: Escalation and volatility.
Conversely, any indication of a significant retaliatory response from Iran, or disruptions in oil and gas supplies, will keep volatility levels high. This scenario would push oil prices and safe-haven assets like gold and US Treasury bonds higher, with a noticeable decline in high-risk assets like stocks and cryptocurrencies.
A sudden shift in market mood: from optimism to caution.
The Israeli strike marked a sharp turn in market sentiment, which had been optimistic on the night before the attack. Optimism surrounding the tech sector and declining inflation had been driving the market towards risk, but the direct strike on Iran turned this narrative upside down.
This scenario recalls previous flashpoints such as the assassination of Qassem Soleimani in 2020 and the tanker attacks in 2019, where markets exhibited similar initial reactions of rising oil prices and strength in US Treasury bonds and the Swiss franc.
The key now lies in how well these developments are contained; history shows that the shock often fades if the escalation is limited.
Investments are shifting towards safe havens: key indicators.
Markets are closely monitoring any additional signs of escalating tensions, driving investors diligently towards safe-haven assets. This risk-averse behavior means:
Japanese yen and US Treasury bonds: expected to continue attracting buying flows.
High-risk assets: may see a significant decline as investors move away from them.
Gold: considered a key indicator for hedging against geopolitical risks and potential inflation, will continue to maintain its appeal.
Oil: its movements remain directly linked to supply expectations from the region, and any threat to the strait will lead to additional increases.
