The markets have calmly welcomed Iran's attack against Israel this weekend, with increases in major stock markets and declines in oil prices predominating.
(Read: World stock markets, with disparate behavior after offensive escalation in the Middle East).
Unlike what happened on Friday, when news of an imminent Iranian attack boosted the prices of crude oil, gold and sovereign bonds, the response from investors this Monday has been “lukewarm.”
The rises have prevailed in the stock markets. In Europe, Milan has gained 0.56%; Frankfurt, 0.54%; Paris, 0.43%; and Madrid, a meager 0.01%. The only exception has been London, which has lost 0.38%.
(See: Maximum price of the dollar exceeded $3,900 this Monday due to geopolitical crisis).
The Euro Stoxx 50, which groups the largest European companies by capitalization, has advanced 0.59%. Investor response has been different in Asia. Tokyo is down 0.74%; Hong Kong, 0.73% and Seoul, 0.42%. On the contrary, Shanghai has gained 1.26%.
On Wall Street, the main indices have opened higher. Although the Dow Jones is still in the green (up 0.1%), the S&P is now flat and the technological Nasdaq is down 0.45%. According to Banca March analysts, the markets' reaction is being “lukewarm” to the “passivity of oil.”
Brent, the benchmark crude oil in Europe, is down 1.5% and is around $89 per barrel. West Texas Intermediate (WTI), a benchmark in the US, fell 1.4% to $84.4 per barrel.
The price of gold, one of the safe haven assets in times of uncertainty, rises 0.5% to $2,355 per ounce, but is far from the maximum reached on Friday ($2,431.5).
In debt markets, bond prices relax, which raises yields (which evolve in the opposite direction). In times of stress, the debt of the strongest economies, such as Germany or the US, also behaves as a safe haven asset.
(Also: The US will not join any retaliatory actions Israel takes against Iran.)
The yield on the ten-year Spanish bond, the benchmark, rises to 3.273%. Along the same lines, the yield on the German bond, considered the safest, advances to 2.437%.
In U.S.A., The yield of the reference bond climbs to 4.628%. Despite the relative calm of the markets, analysts expect a week of volatility.
“Financial markets face a week of high volatility, with geopolitics as the main focus”highlights Manuel Pinto, from XTB.
In his opinion, “as long as Iran and Israel are not heading towards a direct war conflict, oil could find it difficult to break upwards and consolidate one hundred dollars per barrel.”
According to Vincent Chaigneau, Director of Analysis at Generali Investments, the central scenario of his firm is that the attack by Iran, “unprecedented but calibrated”, “will not lead to a sharp escalation”. However, he adds, “Israel's reaction is uncertain and regional tension is intense”.
(Also: How much remains to be recovered from what the Minhacienda mistakenly issued in payroll payments).
“Iran's direct action on Israel has raised fears of further escalation, but, absent a full-blown crisis in the region, which is not our base case, we believe the impact on financial markets will remain contained,” says Gregor MA Hirt, Global Head of Multi-Asset Investments at Allianz Global Investors.
In Colombia, the price of the dollar approached $3,900, with an average closing price of $3,899.
EFE
