The US and Israel bomb Iran and kill its supreme leader. Iran lashes back, rocketing targets throughout the Middle East and importantly for oil markets, hitting ships in Persian Gulf. Oil prices rose 10% in early trading.
And then in our deep-dive interview, ANZ Senior Commodity Strategist Daniel Hynes says markets are focused on how Iran’s retaliation hits oil shipping.
5 things to know in 5 minutes:
The United States and Israel bombed targets throughout Iran on Saturday in a much more aggressive attempt to destroy Iran’s nuclear programme and overthrow the Islamic Republic’s Government. It succeeded in killing Iran’s Supreme Leader, its Defence Minister and its Army Chief. Iran then lashed back, hitting military and civilian targets throughout the Gulf states and Israel. Iran also hit tankers in the Persian Gulf and traffic through the Strait of Hormuz has virtually halted. Oil prices rose 10% in limited early over the counter trade, with Brent up to US$80/barrel.
ANZ Group Chief Economist Richard Yetsenga says global investors will have to consider how the geopolitical map is rewritten by the ongoing conflict, which appears wider and more serious than the limited strikes in June last year.
Meanwhile, in Japan, ANZ’s Head of G3 Economics Brian Martin says the Bank of Japan will have to be careful about rate hikes in the coming months because of slowing consumer spending.
In Australia, bank lending growth slowed in January after a very strong December. ANZ Economist Maddy Dunk says the monthly rise of 0.5%, down from 0.8% in December, was softer than expectations.
In New Zealand, consumer confidence fell in February, thanks to a spike in mortgage rates at the end of December, says ANZ New Zealand Chief Economist Sharon Zollner.
Bernard.
PS: Catch you tomorrow with the full detail of how global markets react later today to the conflict in Iran and the Middle East.
