Headlines:
- Gold prices surge as US-Iran conflict triggers a flight to safety: Record highs in sight
- This Technical Map Shows Oil’s Technical Analysis Before and After the War
- Dollar holds firmer across the board as markets digest US-Iran conflict
- Swiss franc tumbles after SNB warning earlier
- We are more prepared to intervene in FX market in view of international situation – SNB
- Saudi Aramco’s Ras Tanura refinery forced to shut down after reported drone attack
- QatarEnergy halts LNG production after military attacks on its facilities
- EU reportedly says that there is no immediate impact to oil security from US-Iran conflict
- Germany January retail sales -0.9% vs -0.2% m/m expected
- Eurozone February final manufacturing PMI 50.8 vs 50.8 prelim
- UK February final manufacturing PMI 51.7 vs 52.0 prelim
Markets:
- WTI crude oil up over 8% to $72.70; Brent crude oil up over 8% to $79.20
- Gold up 2.2% to $5,395, Silver up 1.4% to $95.15
- USD leads, CHF lags on the day
- European equities lower, DAX down 2.2%
- S&P 500 futures down 1.1%
- US 10-year yields up 2 bps to 3.98%
All eyes stay on the Middle East to start the week, as the US-Iran conflict is captivating the world since the weekend.
Oil prices continue to stay elevated after surging at the open. WTI crude oil is up over 8% still to $72.70, bouncing back after some profit taking activity in Asia earlier in the day.
This also comes as we’re seeing Iran step up drone strikes at key energy facilities across the region, targeting major ones like Aramco’s Ras Tanura refinery and Qatar’s Ras Laffan facility.
The Iran strategy continues to look like one that wants to inflict pain to Gulf nations so as to cause them to pressure the US and Israel to stop the conflict.
As tensions stay high, precious metals continue to be underpinned. Gold hit above $5,400 during the session and is settling just below that now – up over 2% to $5,395. Meanwhile, silver is also up over 1% to $95.15 as the bids continue to flow in.
In the major currencies space, the dollar is the big gainer amid the whole situation. That as we are perhaps seeing the resurgence of the petrodollar trade alongside safety flows, with the yen limited by its own domestic issues and higher oil prices while the franc is seeing the SNB step in to limit its advance.
On the latter, the SNB delivered a warning and EUR/CHF pumped higher after with the pair rising to above 0.9100 now from 0.9060 earlier. Meanwhile, USD/CHF is up over 1% to 0.7770 on the day.
In the equities space, it’s all marked by a retreat in the risk mood. European indices are posting roughly 2% losses across the board while US futures are also settling lower. S&P 500 futures are down by 1.1% as we look to US trading later.
In the bond market, 10-year Treasuries are having to fight a balance of stronger inflation expectations and safety bids. But so far, we’re seeing yields hold higher by nearly 2 bps to 3.98% currently.
This article was written by Justin Low at investinglive.com.