Risk tumbles on Palestine-Israel military conflict, safe havens bid
|The US S&P 500 futures, a risk barometer, are under intense selling pressure in early dealings on Monday, as Asian traders react to the news of a renewed military conflict in the Middle East between Palestine and Israel, which could risk spreading to other parts of the region.
On Saturday, the Palestinian militant group, Hamas, invaded Israel by launching an unprecedented attack from the Gaza Strip into nearby Israeli towns, killing residents and taking hostages.
In retaliation, Israeli conducted airstrikes in Gaza, flattening residential buildings in giant explosions, including a 14-story tower that held dozens of apartments as well as Hamas offices in central Gaza City.
In a televised address Saturday night, Israeli Prime Minister Benjamin Netanyahu said that Israel is at war. He said, “All the places that Hamas hides in, operates from, we will turn them into ruins. Get out of there now,” he told Gaza residents.
The strength, sophistication and timing of the Saturday morning attack shocked Israelis, several media outlets reported.
Investors weigh the risks of a full-blown Middle-East geopolitical conflict, which could trigger a fresh rally in Oil prices, leaving central banks and major economies battling with new inflationary trends. The renewed geopolitical tensions could affect the global economic outlook adversely.
"It’s too early to say" what the implications may be, though oil and equity markets may see immediate fallout, Agustin Carstens, general manager of the Bank for International Settlements (BIS), said in a presentation to the National Association for Business Economics.
In an early response to the Middle East conflict, the US S&P 500 futures are down 0.78% on the day, WTI prices are jumping over 4% to regain $85, Gold is up 1% and the US Dollar Index is rebounding firmly above 106.00.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.